Thinly and Thickly Capitalized Projects: Theorizing the Role of the Finance Markets and Capital Supply in Project Management Studies

In the contemporary economy, finance industry interests and finance theory propositions increasingly determine investment behavior. Project management scholars access conceptual frameworks and methods that shed light on day-to-day project management practices, but such practices are themselves shaped by the supply and cost of finance capital. Consequently, project management scholarship would benefit from a closer look at finance industry practices to better understand how, for example, calculations and risk assessments matter for day-to-day project management practices. In order to theorize the project organization form, finance theory and its key concepts of risk and uncertainty need to be recognized and subject to scholarly inquiry. This article presents two cases of project work, wherein the former (life science ventures) is thinly capitalized on the basis of uncertainty in the development activities, whereas the latter case (housing production) is thickly capitalized, which indicates that subsidies, insurances, and exemptions increase investment appetite. In either case, economic and social welfare are not maximized, which calls for project management scholars to recognize the role of finance industry practices when allocating finance capital to various projects.