@techreport{Schreiter,
  type      = {Working Paper},
  author    = {Maximilian Schreiter},
  title     = {Project financing vs. corporate integration},
  abstract  = {The article addresses the choice between setting up a project entity and integrating the project into a corporation from the perspective of a dynamic corporate finance model in the absence of operational syn- ergies. The analysis builds upon a classic continuous-time framework with tax benefits of debt, costs of default and, more innovatively, a benefit or cost of abandonment derived for two projects with stochastic, correlated revenues. By implementing the model with a simulation-based approach, I show that foremost high correlations, high volatilities and high portions of fixed costs as well as heterogenous volatilities, bankruptcy costs and operational cost structures stimulate independent project structures. Further, a more difficult or costly access to external funds raises the benefits of merging activities in a combined firm.},
  language  = {en}
}