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The Role of Information Density in Infrastructure Investment
Author(s) -
Sharma Rajiv,
Knight Eric
Publication year - 2016
Publication title -
growth and change
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.657
H-Index - 55
eISSN - 1468-2257
pISSN - 0017-4815
DOI - 10.1111/grow.12158
Subject(s) - investment (military) , sample (material) , asset (computer security) , information flow , business , critical infrastructure , finance , variance (accounting) , space (punctuation) , information infrastructure , capital (architecture) , industrial organization , economics , information system , politics , computer science , geography , accounting , computer security , linguistics , chemistry , philosophy , electrical engineering , archaeology , chromatography , political science , law , engineering , operating system
The twentieth century witnessed an extraordinary flow of institutional investment into urban infrastructure. Notwithstanding this, the demand for infrastructure projects exceeds supply of skills and capital. With this disconnect as a backdrop we develop a model of information flow to examine how financial assets are transacted over time and space. Specifically, we build on conceptualisations of “information content” from Clark and O'Connor ([Clark, G., 1997]) to propose a way of theorising “information density”. We apply this specifically to infrastructure investment and find four ways in which infrastructure investment is highly dense. This relates to asset‐level definitions in infrastructure, opacity with respect to how products are securitised, high variance in investment performance, and high relational and investment expertise. We draw on a large qualitative sample of 53 in‐depth interviews, which we validate with quantitative data, to support our findings.