Application of Asset Pricing Model in the determination of Public-Private Partnership
DOI:
https://doi.org/10.47067/ramss.v6i2.282Keywords:
Public-Private Partnership (PPP), Capital Asset Pricing Model-CAPM, Monetary Policy, Viability GapAbstract
The study is to gain a better understanding of how the asset pricing model interacts with Public Private Partnership (PPP) in the larger domain of monetary policy. We employ monetary policy components that include a Panel least square test, and we apply it to the panel data set that contains 131 countries and 15 years of data on investment in the energy sector. According to the findings, the Policy rate is a critical factor in determining the minimum annual required rate of return that an investor earns on their investment. The viability gap refers to the difference between the actual return on investment from a public-private partnership project and the required rate of return of investors that is calculated by using the capital asset pricing model. This study benefits governments, private firms, and ultimately the public of a country. The paper shows how monetary policy can use to fill the issue of viability gaps in the case of public-private partnership investment projects.
References
Snower, D. P. Peter Praet: Current issues of monetary policy.
Alloisio, I., & Carraro, C. (2015). Public-Private Partnerships for Energy Infrastructure: A Focus on the MENA Region. Public Private Partnerships for Infrastructure and Business Development, 149–168. https://doi.org/10.1057/9781137541482_9
Amovi?, G., Maksimovi?, R., & Bun?i?, S. (2020). Critical Success Factors for Sustainable Public-Private Partnership (PPP) in Transition Conditions: An Empirical Study in Bosnia and Herzegovina. Sustainability 2020, Vol. 12, Page 7121, 12(17), 7121. https://doi.org/10.3390/SU12177121
Andres, A., Biller, D., Blades, C., Bloomgarden, D. R., Bright, D., Cabrera Escalante, M., Calvo, J., Carboni, G., Casabianca, B. A., Chaudry, O., Donchev, D., Fay, M., Farole, T., Hallward-Driemeier, M. C., Mitchelitsch, R., Schwartz, J., Ward, T. R., & Yamamoto, C. (2016). The Economic Impact of Public-Private Partnerships in the Infrastructure Sector: Literature Review.
Anunciação, M. da P. de S. C. de. (2014). OECD Principles for good public governance of Public-Private Partnerships?: the role of dedicated PPP units. https://repositorio.ucp.pt/handle/10400.14/16879
Anyanwu, J. C. (2009). Public-Private Partnerships in the Nigerian Energy Sector: Banks’ Roles and Lessons of Experience PUBLIC-PRIVATE PARTNERSHIPS IN THE NIGERIAN ENERGY SECTOR: BANKS’ ROLES AND LESSONS OF EXPERIENCE 1. https://www.researchgate.net/publication/263662241
Arribas, V., & Alfaro, J. A. (2018). 3D technology in fashion: from concept to consumer. Journal of Fashion Marketing and Management, 22(2), 240–251. https://doi.org/10.1108/JFMM-10-2017-0114/FULL/PDF
Axis Law Chambers. (n.d.). Retrieved December 16, 2022, from https://axislaw.pk/
Beccarini, A. (2007). Investment sensitivity to interest rates in an uncertain context: Is a positive relationship possible? Economic Change and Restructuring, 40(3), 223–234. https://doi.org/10.1007/S10644-007-9025-1
Cedrick, B. Z. E., & Long, P. W. (2017a). Investment Motivation in Renewable Energy: A PPP Approach. Energy Procedia, 115, 229–238. https://doi.org/10.1016/J.EGYPRO.2017.05.021
Cedrick, B. Z. E., & Long, P. W. (2017b). Investment Motivation in Renewable Energy: A PPP Approach. Energy Procedia, 115, 229–238. https://doi.org/10.1016/J.EGYPRO.2017.05.021
Çelik, S., & Isaksson, M. (2014). Institutional investors and ownership engagement. OECD Journal: Financial Market Trends, 2013(2), 93–114. https://doi.org/10.1787/FMT-2013-5JZ734PWTRKC
Cervantes, & Zuniga, 2016 public-private - Google Scholar. (n.d.). Retrieved January 12, 2023, from https://scholar.google.com/scholar?hl=en&as_sdt=0%2C5&q=Cervantes%2C+%26+Zuniga%2C+2016+public-private&btnG=
Endo, K., & Seetharam, K. (2021). Public–Private Partnerships in Developing Asian Countries: Practical Suggestions for Future Development Assistance. https://www.adb.org/sites/default/files/publication/734081/adbi-brief-ppp-developing-asian-countries-3rd.pdf
Garcia-Casals, X., Ferroukhi, R., Parajuli, B., & Cambridge Econometrics, F. (2019). Measuring the socio-economic footprint of the energy transition. Energy Transitions 2019 3:1, 3(1), 105–118. https://doi.org/10.1007/S41825-019-00018-6
Gheewala, S. (2019). Energy Reliability through Solar Public-Private Partnerships in India and Bangladesh for Sustainable Community Development. https://jscholarship.library.jhu.edu/handle/1774.2/62130
Guerrieri, P., Luciani, M., & Meliciani, V. (2011). The determinants of investment in information and communication technologies. Http://Dx.Doi.Org/10.1080/10438599.2010.526313, 20(4), 387–403. https://doi.org/10.1080/10438599.2010.526313
Hall, R., Sims, C., Modigliani, F., economic, W. B.-B. papers on, & 1977, undefined. (n.d.). Investment, interest rates, and the effects of stabilization policies. JSTOR. Retrieved January 12, 2023, from https://www.jstor.org/stable/2534257
Hoffman, K. (2003). THE ROLE OF PUBLIC/PRIVATE PARTNERSHIPS IN IMPROVING ACCESS BY POOR COMMUNITIES IN DEVELOPING COUNTRIES TO MODERN ENERGY SERVICES PRESENTED BY.
Jomo, K., Chowdhury, A., Sharma, K., & Platz, D. (2016). Public-private partnerships and the 2030 Agenda for Sustainable Development: fit for purpose? https://euagenda.eu/upload/publications/untitled-62393-ea.pdf
Kurozumi, T., and, W. V. Z.-J. of E. D., & 2008, undefined. (n.d.). Investment, interest rate policy, and equilibrium stability. Elsevier. Retrieved January 12, 2023, from https://www.sciencedirect.com/science/article/pii/S0165188907001455
Liang, Y., Engineering, H. J.-A. in C., & 2018, undefined. (n.d.). Key success indicators for PPP projects: evidence from Hong Kong. Hindawi.Com. Retrieved December 16, 2022, from https://www.hindawi.com/journals/ace/2018/9576496/
Liljeblom, E., Economics, M. V.-F. J. of B., & 2004, undefined. (n.d.). Investment evaluation methods and required rate of return in Finnish publicly listed companies. Papers.Ssrn.Com. Retrieved January 12, 2023, from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=486462
Luo, P., Song, D., & Chen, B. (2020). Investment and financing for SMEs with bank-tax interaction and public-private partnerships. International Review of Economics & Finance, 65, 163–172. https://doi.org/10.1016/J.IREF.2019.10.007
Matos, N., de, A. G.-REAd. R. E., & 2020, undefined. (n.d.). Public-private partnerships: origin, limitations and prospects for public sector accounting. SciELO Brasil. Retrieved December 16, 2022, from https://www.scielo.br/j/read/a/QFx6wzDsVnYzPFybGZpKmrH/abstract/?lang=en
Morrissey, O., & Udomkerdmongkol, M. (2012). Governance, Private Investment and Foreign Direct Investment in Developing Countries. World Development, 40(3), 437–445. https://doi.org/10.1016/J.WORLDDEV.2011.07.004
Muhammad, S., Lakhan, G., … S. Z.-P. J. of, & 2013, undefined. (n.d.). Rate of Interest and its Impact on Investment to the Extent of Pakistan. Econstor.Eu. Retrieved January 12, 2023, from https://www.econstor.eu/handle/10419/188076
Munim, Z. H., & Schramm, H.-J. (2018). The impacts of port infrastructure and logistics performance on economic growth: the mediating role of seaborne trade. Journal of Shipping and Trade, 3(1). https://doi.org/10.1186/S41072-018-0027-0
Observer, J. L.-T. W. B. R., & 2018, undefined. (n.d.). Public-private partnerships in developing countries: The emerging evidence-based critique. Academic.Oup.Com. https://doi.org/10.1093/wbro/lkx008
Oktavianus, A., & Mahani, I. (n.d.). A Global Review of Public Private Partnerships Trends and Challenges for Social Infrastructure. https://doi.org/10.1051/matecconf/201814706001
Papers Wuhan, S., Suyuan, L., & Khurshid, A. (n.d.). The effect of interest rate on investment; Empirical evidence of Jiangsu Province, China. Jois.Eu. https://doi.org/10.14254/2071
Pukhova, M. M., Merkulina, I. A., Bashkov, D. Y., Merkulina, D., & Yuryevich, B. (2021). Developing public–private partnership projects to enhance innovation capability in the defence industry. Mdpi.Com. https://doi.org/10.3390/economies9040147
Theory, B. D.-J. of E., & 2001, undefined. (n.d.). Investment and interest rate policy. Elsevier. Retrieved January 12, 2023, from https://www.sciencedirect.com/science/article/pii/S0022053100927650
Vecchi, V., Taurelli, S., Foundation, M. van der M.-E. T., & 2020, undefined. (n.d.). Public-Private Partnerships for Skills Development: A Governance Perspective. Volume I. Thematic Overview. ERIC. Retrieved December 17, 2022, from https://eric.ed.gov/?id=ED610845
Yurdakul, H., Kama?ak, R., & Yazar Öztürk, T. (2022). Macroeconomic drivers of Public Private Partnership (PPP) projects in low income and developing countries: A panel data analysis. Borsa Istanbul Review, 22(1), 37–46. https://doi.org/10.1016/J.BIR.2021.01.002
Zhongming, Z., Linong, L., Xiaona, Y., Wangqiang, Z., & Wei, L. (2019). Realizing the Potential of Public–Private Partnerships to Advance Asia’s Infrastructure Development. https://doi.org/10.22617/TCS189648-2