Is the Level of Financial Sector Development a Key Determinant of Private Investment in the Power Sector?

Ba, Lika; Gasmi, Farid; Noumba Um, Paul

dc.creator	Ba, Lika
dc.creator	Gasmi, Farid
dc.creator	Noumba Um, Paul
dc.date	2012-03-19T18:41:03Z
dc.date	2012-03-19T18:41:03Z
dc.date	2010-07-01
dc.date.accessioned	2023-02-17T21:04:50Z
dc.date.available	2023-02-17T21:04:50Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100722084641
dc.identifier	http://hdl.handle.net/10986/3857
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244821
dc.description	This paper seeks to assess the extent to which a country's overall level of development and that of its financial sector, in particular, are factors that attract private capital into infrastructure projects. The authors investigate these effects in a 1990-2007 dataset on the power sector in 37 developing countries. The results suggest that economic growth is a key determinant of private investors' investment in infrastructure projects, and that investors tend to take countries governance quality into account in their decisions to invest. The empirical results highlight that the development of the financial sector also plays a significant role in private investors' decisions to enter infrastructure sectors. In particular, the degree of country risk and exchange rate volatility is found to be negatively related to the volume of private sector investment in power projects. Furthermore, when the banking sector and the capital market are separately treated in the analysis, the existence of a well functioning capital market is the main attracting factor. In addition, the existence of an independent energy regulatory authority significantly improves the level of private investors' implication in energy projects. When accounting for the interactions between the overall economic development and the financial sector development variables, the effects of these variables are still significant and the results also confirm the importance of an independent energy sector regulator.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5373
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ACCOUNTING
dc.subject	ADVERSE EFFECTS
dc.subject	BANK FINANCING
dc.subject	BANK LOAN
dc.subject	BANK POLICY
dc.subject	BANKING SECTOR
dc.subject	BANKING SECTOR DEVELOPMENT
dc.subject	BOND
dc.subject	BOND BANK
dc.subject	BOND FINANCING
dc.subject	BOND ISSUANCE
dc.subject	BOND ISSUANCES
dc.subject	BONDS
dc.subject	BORROWER
dc.subject	BORROWING
dc.subject	BORROWING CAPACITY
dc.subject	BROAD ACCESS
dc.subject	CAPITAL MARKET
dc.subject	CAPITAL MARKET INVESTORS
dc.subject	CAPITAL MARKETS DEVELOPMENT
dc.subject	CENTRAL BANK
dc.subject	CENTRAL BANKS
dc.subject	CLASS OF BOND
dc.subject	CLIENT COUNTRIES
dc.subject	COMMERCIAL BANKS
dc.subject	CONSUMER PROTECTION
dc.subject	CONTRACTUAL SAVINGS
dc.subject	CONTRACTUAL SAVINGS INSTITUTIONS
dc.subject	CORRUPTION
dc.subject	COUNTRY RISK
dc.subject	CREDIT RATINGS
dc.subject	CREDITORS
dc.subject	CREDITWORTHINESS
dc.subject	CURRENCY DEVALUATION
dc.subject	DEBT
dc.subject	DEBT-EQUITY
dc.subject	DEMOGRAPHIC
dc.subject	DEPOSIT
dc.subject	DEVALUATION
dc.subject	DEVELOPING COUNTRIES
dc.subject	DEVELOPMENT ECONOMICS
dc.subject	DOMESTIC BANKS
dc.subject	DOMESTIC CAPITAL
dc.subject	DOMESTIC CAPITAL MARKET
dc.subject	DOMESTIC CAPITAL MARKETS
dc.subject	DOMESTIC ECONOMY
dc.subject	ECONOMETRIC ANALYSIS
dc.subject	ECONOMETRIC MODELS
dc.subject	ECONOMETRICS
dc.subject	ECONOMIC DEVELOPMENT
dc.subject	ECONOMIC GROWTH
dc.subject	ECONOMIC RESEARCH
dc.subject	ECONOMIC RISK
dc.subject	ECONOMIC SYSTEM
dc.subject	EMPLOYMENT
dc.subject	EQUITY FINANCING
dc.subject	EXCHANGE RATE
dc.subject	EXCHANGE RATE FLUCTUATIONS
dc.subject	EXISTING INFRASTRUCTURES
dc.subject	EXPOSURE
dc.subject	EXTERNALITIES
dc.subject	FINANCES
dc.subject	FINANCIAL DEVELOPMENT
dc.subject	FINANCIAL INSTITUTIONS
dc.subject	FINANCIAL INSTRUMENTS
dc.subject	FINANCIAL INTERMEDIARIES
dc.subject	FINANCIAL MARKET
dc.subject	FINANCIAL MARKET DEVELOPMENT
dc.subject	FINANCIAL MARKETS
dc.subject	FINANCIAL MARKETS DEVELOPMENT
dc.subject	FINANCIAL REFORMS
dc.subject	FINANCIAL RISK
dc.subject	FINANCIAL SECTOR
dc.subject	FINANCIAL SECTOR DEVELOPMENT
dc.subject	FINANCIAL SECTORS
dc.subject	FINANCIAL SYSTEM
dc.subject	FINANCING INSTRUMENTS
dc.subject	FINANCING OF INFRASTRUCTURE PROJECTS
dc.subject	FISCAL REFORMS
dc.subject	FOREIGN CURRENCY
dc.subject	FOREIGN CURRENCY DEBT
dc.subject	FOREIGN EXCHANGE
dc.subject	FOREIGN EXCHANGE RISK
dc.subject	FOREIGN MARKETS
dc.subject	GDP
dc.subject	GDP PER CAPITA
dc.subject	GROWTH RATE
dc.subject	GROWTH RATES
dc.subject	HOUSEHOLDS
dc.subject	INCOME
dc.subject	INCOME GROUP
dc.subject	INCOME LEVELS
dc.subject	INDEPENDENT REGULATOR
dc.subject	INFORMATION ON MARKET
dc.subject	INFRASTRUCTURE DEVELOPMENT
dc.subject	INFRASTRUCTURE FINANCE
dc.subject	INFRASTRUCTURE FINANCING
dc.subject	INFRASTRUCTURE INDUSTRIES
dc.subject	INFRASTRUCTURE INVESTMENTS
dc.subject	INFRASTRUCTURE PROJECT
dc.subject	INFRASTRUCTURE PROJECTS
dc.subject	INSTITUTIONAL ENVIRONMENT
dc.subject	INSTITUTIONAL REFORMS
dc.subject	INSTRUMENT
dc.subject	INTEREST RATES
dc.subject	INTERNATIONAL BANK
dc.subject	INTERNATIONAL BANKS
dc.subject	INTERNATIONAL INVESTMENT
dc.subject	INTERNATIONAL TRADE
dc.subject	INVESTMENT DECISIONS
dc.subject	INVESTMENT IN INFRASTRUCTURE
dc.subject	INVESTMENT IN INFRASTRUCTURE PROJECTS
dc.subject	INVESTMENT REGIME
dc.subject	INVESTOR CONFIDENCE
dc.subject	LEGAL ENVIRONMENT
dc.subject	LEGAL SYSTEM
dc.subject	LEVEL OF RISK
dc.subject	LIBERALIZATION
dc.subject	LIFE INSURANCE
dc.subject	LIQUIDITY
dc.subject	LOAN CLUBS
dc.subject	LOANS FROM BANKS
dc.subject	LOCAL BANK
dc.subject	LOCAL CAPITAL MARKETS
dc.subject	LOCAL CURRENCY
dc.subject	LOCAL FINANCIAL MARKETS
dc.subject	LOCAL GOVERNMENTS
dc.subject	LONG-TERM FINANCE
dc.subject	LONG-TERM LOANS
dc.subject	LOW-INCOME COUNTRIES
dc.subject	MACROECONOMIC STABILITY
dc.subject	MARKET FAILURES
dc.subject	MARKET TURNOVER
dc.subject	MBI
dc.subject	MIDDLE INCOME COUNTRIES
dc.subject	MIDDLE INCOME COUNTRY
dc.subject	MIDDLE-INCOME COUNTRIES
dc.subject	MONOPOLIES
dc.subject	OUTPUT
dc.subject	PENSION
dc.subject	PENSION FUNDS
dc.subject	PER CAPITA INCOME
dc.subject	POLITICAL SYSTEM
dc.subject	POSITIVE EFFECTS
dc.subject	PRIVATE CAPITAL
dc.subject	PRIVATE CAPITAL FLOWS
dc.subject	PRIVATE INFRASTRUCTURE
dc.subject	PRIVATE INVESTMENT
dc.subject	PRIVATE INVESTMENT IN INFRASTRUCTURE
dc.subject	PRIVATE INVESTMENT IN POWER
dc.subject	PRIVATE INVESTMENTS
dc.subject	PRIVATE INVESTORS
dc.subject	PRIVATE SECTOR DEVELOPMENT
dc.subject	PRIVATE SECTOR INVESTMENT
dc.subject	PRIVATE SECTOR INVESTMENT IN INFRASTRUCTURE
dc.subject	PRIVATE SECTOR INVOLVEMENT
dc.subject	PRIVATE SECTOR PARTICIPATION
dc.subject	PRIVATIZATION
dc.subject	PROJECT SPONSORS
dc.subject	PUBLIC GOOD
dc.subject	PUBLIC INVESTMENT
dc.subject	PUBLIC SERVICES
dc.subject	PUBLIC SPENDING
dc.subject	PUBLIC UTILITIES
dc.subject	PUBLIC-PRIVATE PARTNERSHIP
dc.subject	PUBLIC-PRIVATE PARTNERSHIPS
dc.subject	QUALITY OF SERVICE
dc.subject	REGULATOR
dc.subject	REGULATORY AGENCIES
dc.subject	REGULATORY AGENCY
dc.subject	REGULATORY AUTHORITIES
dc.subject	REGULATORY AUTHORITY
dc.subject	REGULATORY ENVIRONMENT
dc.subject	REGULATORY FRAMEWORK
dc.subject	REGULATORY GOVERNANCE
dc.subject	RISK FACTOR
dc.subject	RISK FACTORS
dc.subject	RISK MITIGATION
dc.subject	RULE OF LAW
dc.subject	SAVINGS INSTITUTIONS
dc.subject	SECONDARY MARKETS
dc.subject	SERVICE DELIVERY
dc.subject	SERVICE PROVISION
dc.subject	SHAREHOLDERS
dc.subject	SOVEREIGN BONDS
dc.subject	STOCK MARKET
dc.subject	STOCK MARKET CAPITALIZATION
dc.subject	STOCKS
dc.subject	SUSTAINABLE DEVELOPMENT
dc.subject	TRADE BARRIERS
dc.subject	TRANSACTION
dc.subject	TRANSACTION COSTS
dc.subject	TRANSPARENCY
dc.subject	TURNOVER
dc.subject	TURNOVER RATIO
dc.subject	URBANIZATION
dc.subject	VOLATILITY
dc.title	Is the Level of Financial Sector Development a Key Determinant of Private Investment in the Power Sector?
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	The World Region