ZHAW International Business Seminar Series: Electing to Defer

Name: ZHAW International Business Seminar Series: Electing to Defer
Start: 2024-09-03T12:30:00+02:00
End: 2024-09-03T13:30:00+02:00

3 September 2024

Elections create political uncertainty with alternative outcomes that are important for investors in infrastructure projects. In the latest presentation of the International Business Seminar Series, Paul M. Vaaler presents a framework for "political real options": This can explain when investors are more inclined to proceed with the financial close of their projects before an election or wait for the outcome.

Paul M. Vaaler from the University of Minnesota will share the extensive database on which his research is built with the participants of the current IBSS session: Together with colleagues, he has analyzed financing decisions for more than 7,000 projects. The framework presented refers to figures from 80 countries in which a total of 278 national elections were held between 1998 and 2020 in parallel to the project financing analyzed.

Together we can discuss Vaaler's key findings: Delayed funding is more likely when elections are close and their outcomes potentially beneficial to sponsors. His study challenges the assumption that elections in general slow down investment and identifies specific election scenarios and project factors that cause investors to defer their commitment to a project.

IBSS 2024