Financing Preference Behaviour for Private Finance Initiative (PFI) Projects
Project Financing Initiative (PFI) projects require the private sector to invest an enormous amount of capital for the development of public projects. The private sector has to seek cost-effective financing sources for their survival in the long-term concession. Conventional financing uses widely; however, Islamic financing promises better financing through profit and loss sharing. This paper reviews financing preferences for PFI projects and the factors influencing the choice of funding. The results show that religious perspective, quality of services, financing facilities and reputation are the factors that are expected will influence the financing preference behaviour, either Islamic or conventional finance.
© 2016. The Authors. Published for AMER ABRA by e-International Publishing House, Ltd., UK. Peer–review under responsibility of AMER (Association of Malaysian Environment-Behaviour Researchers), ABRA (Association of Behavioural Researchers on Asians) and cE-Bs (Centre for Environment-Behaviour Studies, Faculty of Architecture, Planning & Surveying, Universiti Teknologi MARA, Malaysia.
Keywords: Conventional project finance; Islamic project finance; preference; Private Finance Initiative
Abdullah, N., Sufian, A., Asenova, D., & Bailey, S. J. (2014). PPP / PFI in Malaysian Development Plans : Purpose, structure, implementation, financing and risk transfer. In proceedings of 5th Asia-Pacific business research conference (pp. 1–14). Kuala Lumpur, Malaysia.
Ajzen, I., & Fishbein, M. (1980). Understanding attitudes and predicting social change. New Jessey: Prentice-Hill.
Ali, L., Ali, A., & Khwaja, H. (2013). Comparison of Islamic and conventional banking on the basis of riba and services. International review of management and business research, 2(3), 837–846.
Bikas, E., Jurevičienė, D., Dubinskas, P., & Novickytė, L. (2013). Behavioural finance: The emergence and development trends. Procedia - social and behavioral sciences, 82, 870–876.
Bilal, M., & Abbas, S. (2015). Comparison of Islamic banking and conventional banking: An empirical review.
Bank Negara Malaysia. (2015). (http://www.bnm.gov.my/index.php?ch=li&cat=banking&type=〈=en). Retrived on 1st July 2015.
Chiang, Y.-H., Cheng, E. W. L., & Lam, P. T. I. (2011). A three-phase approach to construction borrowing decisions. Architectural science review, 54(3), 225–231.
Damnjanovic, I., & Vajdic, N. (2012). Roadway network externalities in project finance loan arrangements. Public works management & policy, 17(4), 328–347.
Danso, A., & Adomako, S. (2014). The financing behaviour of firms and financial crisis. Managerial finance, 40(12), 1159–1174.
Daube, D., Vollrath, S., & Alfen, H. W. (2008). A comparison of project finance and the forfeiting model as financing forms for PPP projects in Germany. International journal of project management, 26(4), 376–387.
Duffield, C. F., & Clifton, C. J. (2009). Combining finance and design innovation to develop winning proposals. In policy, finance & management for public-private partnerships edited (pp. 327–345). Blackwell Publishing Ltd.
Echchabi, A., & Olaniyi, O. N. (2012). Malaysian consumers' preferences for Islamic banking attributes. International journal of social economics, 39(11), 859–874.
Engel, E., Fischer, R., & Galetovic, A. (2010). The economics of infrastructure finance : Public-Private Partnerships versus public provision. European Investment Bank, 15(1), 40–70.
EPEC. (2011). The guide to guidance: How to prepare , procure and deliver PPP projects.
Gatti, S. (2013). Project finance in theory and practice: designing, structuring, and financing private and public projects. Academic Press.
Guzavicius, A., Vilkė, R., & Barkauskas, V. (2014). Behavioural finance: Corporate social responsibility approach. Procedia - social and behavioral sciences, 156(April), 518–523.
Hanif, M. (2011). Differences and similarities in Islamic and conventional banking. International Journal of Business and Social Sciences, 2(2), 166–175.
HM Treasury. (2012). A new approach to public private partnerships. London, UK.
Huda, A. N. (2012). The development of Islamic financing scheme for SMEs in a developing country: The Indonesian case. Procedia - social and behavioral sciences, 52, 179–186.
Irimia-Diéguez, A. I., González-Villegas, J. B., & Oliver-Alfonso, M. D. (2014). The financial performance of an innovative megaproject. Procedia - social and behavioral sciences, 119(2005), 417–426.
Ismail, A. G. (2013). Public Private Partnerships : Lesson from Sukuk. Saudi Arabia.
Javed, A., & Fida, B. A. (2015). Islamic project financing in Pakistan : Current challenges and opportunities ahead. Iranian journal of management studies, 8(1), 47–71.
Jensen, M., & Meckling, W. (1976). Theory of the firm: managerial behaviour, agency costs and capital structure. Journal of financial economics, 3, pp. 305-360.
Jurevičienė, D., Bikas, E., Keliuotytė-Staniulėnienė, G., Novickytė, L., & Dubinskas, P. (2014). Assessment of corporate behavioural finance. Procedia - social and behavioral sciences, 140, 432–439.
Khalid, M. (2014). Murabahah versus interest rate , the equilibrium relationship with macroeconomic variables in Jordanian economy : An ARDL approach. Procedia - social and behavioral sciences, 129, 349–357.
Khediri, K. Ben, Charfeddine, L., & Youssef, S. Ben. (2015). Islamic versus conventional banks in the GCC countries: A comparative study using classification techniques. Research in International Business and Finance, 33, 75–98.
Martín, L., Calvo, F., Hermoso, A., & de Oña, J. (2014). Analysis of light rail systems in Spain according to their type of funding. Procedia - social and behavioral sciences, 162(PANAM 2014), 419–428.
Modigliani, F. & Miller, M. (1958). The cost of capital, corporation finance, and theory of investment, American Economic Review, 48, pp. 261-297.
Myers, S., (1984). The capital structure puzzle. Journal of finance, 34, pp.575-592.
Myers, S. & Majluf, N. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of financial economics, 13, pp. 187-221.
Quresh, A. H., Hussain, Z., & Rehman, K. U. (2012). A comparison between Islamic banking and conventional banking sector in Pakistan. Information management and business review, 4(3), 195–204.
Riaz, A., Awad, R., & Nadia, S. (2014). Customer satisfaction between Islamic and conventional banks : Case of Pakistan. Social and basic sciences research review, 1(2), 69–73.
Rod, M., ALHussan, F. B., & Beal, T. (2015). Conventional and Islamic banking : perspectives from Malaysian Islamic bank managers. International journal islamic marketing and branding, 1(1), 36–54.
Saad, N. M. (2012). Comparative analysis of customer satisfaction on Islamic and conventional banks in Malaysia. Asian social science, 8(1), 73–80.
UN ESCAP. (2011). A Guidebook on Public-Private Partnership in Infrastructure. Bangkok, Thailand.
Wang, N. (2014). Private finance initiative as a new way to manage public facilities. Facilities, 32(11/12), 584–605.
Zawawi, N. A. W. A., Ahmad, M., Umar, A. a., Khamidi, M. F., & Idrus, A. (2014). Financing PF2 projects: Opportunities for Islamic project finance. Procedia engineering, 77, 179–187.
Zinas, B. Z., & Mohd Jusan, M. (2010). Choice behaviour of housing attributes : Theory and measurement. Asian journal of environment-behaviur studies, 1(2), 1–18.
How to Cite
eISSN: 2398-4287 © Year. The Authors. Published for AMER ABRA cE-Bs by e-International Publishing House, Ltd., UK. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer–review under responsibility of AMER (Association of Malaysian Environment-Behaviour Researchers), ABRA (Association of Behavioural Researchers on Asians) and cE-Bs (Centre for Environment-Behaviour Studies), Faculty of Architecture, Planning & Surveying, Universiti Teknologi MARA, Malaysia.