Improving Value for Money in Italian Project Finance

Managerial Finance, Vol. 40, Iss 11 pp. 1058-1077, 2014

21 Pages Posted: 25 Aug 2015

See all articles by Roberto Moro Visconti

Roberto Moro Visconti

Università Cattolica del Sacro Cuore - Department of Business Administration

Date Written: September 2013

Abstract

Purpose -- Detect how Value for Money (VfM) in Italian Project Finance (PF) investments can be enhanced and criticalities minimized, with a synergistic interaction of macroeconomic, legal and institutional actions.

Design/methodology/approach -- Analysis of VfM qualitative and quantitative key drivers, within a Public-private partnership (PPP) framework with specific reference to a recession context, with infrastructural capital rationing implications. Empirical evidence is given by an Italian PF healthcare model, testing the impact of legal and macroeconomic changes.

Findings -- Deleverage, ignited by W-shaped recession, disinflates PPP investments, so forcing to innovative and penniless solutions. Unreliable and short-sighted legislation and consequent unfriendly business climate may frighten investors, so decreasing competition and VfM.

Research limitations/implications -- VfM sensitivity to macroeconomic and legal/institutional parameters is too wide and capriciously erratic to be comprehensively modeled. Tips for further research include pro-growth tax and budgetary policies, risk minimization issues and other synergistic targets.

Practical implications -- Guidance to regulators to fine tune legal and institutional tools, so as to create a stable, business friendly environment. Recessions may be softened by sensitive policymaking, or exacerbated by short-sighted ignorance and lack of strategic focus.

Originality/value -- Unprecedented analysis of legal and macroeconomic changes on VfM in Italian PF investments, with original tips for VfM optimization, in a comprehensive PPP framework.

Keywords: PPP, traditional procurement, cost of capital, recession, legislative risk, fiscal policy, Keynesian growth

JEL Classification: E62, H50, K23

Suggested Citation

Moro Visconti, Roberto, Improving Value for Money in Italian Project Finance (September 2013). Managerial Finance, Vol. 40, Iss 11 pp. 1058-1077, 2014, Available at SSRN: https://ssrn.com/abstract=2650350

Roberto Moro Visconti (Contact Author)

Università Cattolica del Sacro Cuore - Department of Business Administration ( email )

Largo Agostino Gemelli 1
Milano, 20123
Italy

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