Determining Critical Success Factors for Public–Private Partnership Asset-Backed Securitization: A Structural Equation Modeling Approach

Abstract

Public–private partnership (PPP) has been widely applied in China and many developing countries in the recent decade. As new PPP projects gradually enter the operational phase, the issue of refinancing becomes increasingly important. PPP–ABS plays an indispensable role in PPP project refinancing. The factors that promote the success of the emerging PPP–ABS in the China financial market need to be determined. To accomplish two objectives, namely, to identify critical success factors (CSFs) and to explore the relationship between these factors and the success of the PPP asset-backed securitization (PPP–ABS) of this research, methods such as a questionnaire survey and structural equation modeling (SEM) were conducted successively. Four success factors, including underlying asset quality (UAQ), original equity holder credit (OEHC), rationality of security design (RoSD) and maturity of relative institutions (MoRI), were identified in this study. Consequently, nineteen theoretical hypotheses were developed and tested. It is shown in the SEM approach that UAQ and OEHC positively influence the success of PPP–ABS, alongside issuance characteristics (IC) that mediate the relationship between the success of PPP–ABS and UAQ, RoSD and MoRI, respectively. This finding increased knowledge of PPP–ABS and how investors and government can benefit from it.

Evaluation of PPP-ABS investment environment based on combined weighting of level difference maximization and TOPSIS method

“…Their research highlighted the importance of supporting institutional systems and market factors for PPP-ABS [13]. Liu et al (2021) determined the critical success factors for PPP-ABS through a questionnaire survey and adopted structural equation modeling to explore the relationship between these factors and the success of PPP-ABS. The results showed that the maturity of relevant institutions, including transparent information disclosure, mature accounting and tax standards, mature secondary market, clear and effective government regulation, will affect the issuance and success of PPP-ABS [12].…”

“…However, with the rapid promotion of PPP, many problems have been exposed, that are not conducive to its sustainable development [8,9]. ABS can improve the liquidity of basic assets [10,11], which can activate the existing PPP project assets [12][13][14][15]. By the end of 2016, the PPP-ABS was officially proposed in China.…”

Formwork System Selection Criteria for Building Construction Projects: A Structural Equation Modelling Approach

“…Moreover, through a measurement model and a structural model, SEM is an effective methodology for assessing model constructs and hypothesized structural relations among latent factors [74]. Thus, SEM has been widely used in the field of construction management, e.g., [58,[75][76][77][78][79][80]. The structural model can be developed and analyzed further after the measurement model has been evaluated satisfactorily [65].…”

Credit Risk Evaluation of Asset Securitization of PPP Project of Sports Public Service Venues Based on Random Forest Algorithm

“…In order to ensure the standardization and unity of a large amount of relevant index data, data preprocessing measures need to be taken to prepare for the screening of indicators in random forest model. e data standardization processing is shown in equations ( 1)- (3).…”

“…The stadiums and gymnasiums operated by the government after the game cannot produce good social benefits and even become idle buildings because of the single function, low actual utilization rate and the operation mode do not meet the market demand. This situation undoubtedly increases the financial burden of the local government and fails to achieve the purpose of making full use of social resources [ 3 ]. Therefore, combined with past cases and experience, the construction and management of sports public service venues has produced a form of cooperation between the government and social capital, namely PPP mode.…”