Home

    About

    Open Access Repository

    SearchBrowse by ThemeBrowse by AuthorBrowse by TypeMost Popular Titles

    Other Resources

    Curators

    Events

    Contributing Think Tanks

    Networks

    Using Content

    FAQs

    Terms of Use

    13,800+ curated items from top Think Tanks.
    JavaScript is disabled for your browser. Some features of this site may not work without it.

    Home

    About

    Open Access Repository

    SearchBrowse by ThemeBrowse by AuthorBrowse by TypeMost Popular Titles

    Other Resources

    Curators

    Events

    Contributing Think Tanks

    Networks

    Using Content

    FAQs

    Terms of Use

    Default Risks, Moral Hazard, and Market-Based Solution: Evidence from Renewable Energy Market in Bangladesh

    Hossain, Monzur; Yoshino, Naoyuki; Taghizadeh-Hesary, Farhad | September 2019
    Abstract
    This paper analyzes a unique case of default risks and associated factors of a solar home system (SHS) program in Bangladesh and, within that context, proposes a theoretical market-based solution to finance a renewable energy (RE) program. The paper first develops a theoretical framework that highlights the problem of moral hazard in a subsidized government-sponsored program and then empirically assesses the default risks under the program. Using a primary survey data of 1,300 households, and applying probit and cox’s proportional hazard model, we find that financial constraints, higher prices, natural disasters, and poor after-sales service are the factors that increase the probability of default, but in a different magnitude depending on the nature of customers. The factors that increase the probability of default for the group who are not willing to pay back (about 35% of total defaulters) are linked to adverse selection, perhaps due to moral hazard problems. The proposed market-based solution predicts that if the government uses a spillover revenue-based financing approach, it will increase the rate of return for private investors as well as the efficiency of RE programs.
    Citation
    Hossain, Monzur; Yoshino, Naoyuki; Taghizadeh-Hesary, Farhad. 2019. Default Risks, Moral Hazard, and Market-Based Solution: Evidence from Renewable Energy Market in Bangladesh. © Asian Development Bank Institute. http://hdl.handle.net/11540/11231.
    Keywords
    Household Energy Consumption
    Industrial Energy Consumption
    Results-Based Monitoring And Evaluation
    Evaluation Techniques
    Evaluation Studies
    Evaluation Methods
    Commercial Energy
    Urban Development Finance
    Trade Finance
    Small Business Finance
    Rural Finance
    Roundtable on International Trade and Finance
    Regional Development Finance
    Public Service Finance
    Public Finance
    Project Finance
    Private Finance
    Nonbank Financing
    Non-Bank Financial Institutions
    Municipal Finance
    Local Government Finance
    Local Currency Financing
    Limited Resource Financing
    International Financial Institutions
    Infrastructure Financing
    Industrial Finance
    Government Financial Institutions
    Government Finance
    Financing of Infrastructure
    Financial Sector Development
    Financial Regulation
    Domestic Energy
    Energy Demand
    Energy Prices
    Energy Pricing Policy
    Energy Supply
    Primary Energy Supply
    Development Indicators
    Social Participation
    Low Income Groups
    Income Generation
    Newly Industrializing Countries
    Taxation
    Public Accounting
    National Budget
    Municipal Bonds
    Local Government
    Local Taxes
    International Monetary Relations
    International Financial Market
    International Banking
    Central Banks
    Business Financing
    Capital Resources
    Budgetary Policy
    Capital Needs
    Corporate Divestiture
    Capital Instruments
    Pension Funds
    Insurance Companies
    Banks
    Portfolio Management
    Fiscal Administration
    Economics of Education
    Development Banks
    Subsidy
    Default
    Default risk
    Solar battery
    Renewable energy resource
    Green Energy
    Power resource
    Electric power
    Energy development
    Renewable energy resource
    Energy assistance
    Energy tax credit
    Electric power consumption
    Cost effectiveness
    Supply and demand
    Prices
    Energy resource
    Energy consumption
    Price Indexes
    Infrastructure
    Use tax
    Taxing power
    State of taxation
    Tax-sales
    Tax revenue estimating
    Tax planning
    Spendings tax
    Special assessments
    Tax administration and procedure
    Sales tax
    Real property and taxation
    Progressive taxation
    Effect of taxation on land use
    Effect of taxation on labor supply
    Intergovernmental tax relations
    Inheritance and transfer tax
    Energy tax
    Show allCollapse
    Citable URI
    http://hdl.handle.net/11540/11231
    Metadata
    Show full item record
    Thumbnail
    adbi-wp1005.pdf (820.1Kb)
    Author
    Hossain, Monzur
    Yoshino, Naoyuki
    Taghizadeh-Hesary, Farhad
    Theme
    Energy
    Finance

    Related items

    • Thumbnail

      Response of Stock Markets to Monetary Policy: An Asian Stock Market Perspective 

      Yoshino, Naoyuki; Taghizadeh-Hesary, Farhad; Hassanzadeh, Ali; Prasetyo, Ahmad Danu (Asian Development Bank Institute, 2014-09-05)
      We estimate the response of Asian stock market prices to exogenous monetary policy shocks using a vector error correction model. In our paper, monetary policy transmits to stock market price through three routes: money by itself, exchange rate, and inflation. Our result points to the fact that stock prices increase persistently in response to an exogenous easing monetary policy. Variance deposition ...
      We estimate the response of Asian stock market prices to exogenous monetary policy shocks using a vector error correction model. In our paper, monetary policy transmits to stock market price through three routes: money by itself, exchange rate, and ...
    • Thumbnail

      Supply Chains and Credit-Market Shocks: Some Implications for Emerging Markets 

      Jinjarak, Yothin (Asian Development Bank Institute, 2013-11-06)
      Driven by the increasingly important role of supply chains in global production, this paper studies empirical association between global credit-market shocks and firm behavior towards liquidity needs across countries and industries. Focusing on the adjustment of working-capital financing, we find two pieces of supporting evidence from international firm-level panel data covering the period 2002:I–2012:IV. ...
      Driven by the increasingly important role of supply chains in global production, this paper studies empirical association between global credit-market shocks and firm behavior towards liquidity needs across countries and industries. Focusing on the ...
    • Thumbnail

      Foreign Bond Markets and Financial Market Development: International Perspectives 

      Batten, Jonathan A.; Hog, Warren P.; Szilagyi, Peter G. (Asian Development Bank, 2009-12-15)
      The domestic bond markets of the Asia and Pacific region have grown considerably since the Asian financial crisis of 1997, although they remain undeveloped relative to the region’s weight in the world economy. This paper proposes that in order to encourage further development of these markets, regulators should make them more accessible to foreign borrowers. To that end we offer insights into the ...
      The domestic bond markets of the Asia and Pacific region have grown considerably since the Asian financial crisis of 1997, although they remain undeveloped relative to the region’s weight in the world economy. This paper proposes that in order to ...
     
    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise
    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise