Empirical Analysis of Firms’ Willingness to Participate in Infrastructure PPP Projects

Abstract

Private participation is the key element in forming public private partnership (PPP). Numerous studies have identified the factors of private participation in infrastructure projects, but previous results rarely focused on the willingness to participate in infrastructure PPP projects from the private sector's perspective. This research examines the factors of the private participation in PPP when considering willingness to participate as a function of internal (i.e., a firm's nature) and external factors (i.e., institutions, government behavior, and project characteristics). Using the logistic regression model and the data from the questionnaire survey, this research finds that nine variables have a significant coefficient, i.e. profitability, political connection, government intervention, government support, project complexity, and project experience; especially for those companies with more project experiences, political connection and higher profitability are more likely to be willing to participate in PPP projects. In contrast to previous studies, the research finds no support for the effect of institutional environment and public support on firms' willingness to participate in PPP. These findings can serve as a valuable reference in shaping the private sector's motivation to participate in PPP. Factors of private participation in PPP projects are explained and discussed in the context of the Chinese PPP experience and practice.

Investigating Private Sectors’ Behavioral Intention to Participate in PPP Projects: An Empirical Examination Based on the Theory of Planned Behavior

“…Lastly, a total of 55 papers were identified [3,4,7,16,49,50,. These papers examine different PPP topics, such as private sectors' perception of PPP projects [56][57][58][59], driving forces for the private sector to participate in PPP projects [3,7,16,[60][61][62][63][64], and critical success factors for the implementation of PPP projects [65][66][67][68][69]. All these topics are highly related to the research problem of this study.…”

“…In addition to the technical strength, the private companies must also have a solid financial foundation and strong borrowing capacity since PPP projects typically require huge investments [16,58,63,65,69,77,78,[86][87][88][89][90][91]. Additionally, having a good relationship with the government is also important for private companies that wish to participate in PPP projects, as it can bring them numerous benefits, such as supportive policy, financial incentives, and advance notice on future PPP projects [58,64,70,88,92,93]. Furthermore, private companies that have previously conducted PPP projects might enjoy the advantage of easily drawing on their past experiences when considering whether to participate in a new PPP project [58,83,91,94].…”

“…Additionally, having a good relationship with the government is also important for private companies that wish to participate in PPP projects, as it can bring them numerous benefits, such as supportive policy, financial incentives, and advance notice on future PPP projects [58,64,70,88,92,93]. Furthermore, private companies that have previously conducted PPP projects might enjoy the advantage of easily drawing on their past experiences when considering whether to participate in a new PPP project [58,83,91,94]. In the light of the above issues, six observable variables-"financial capability (PBC1)", "technical strength (PBC2)", "past experiences (PBC3)", "borrowing capacity (PBC4)", "good relationship with government (PBC5)", and "information superiority (PBC6)"-were proposed to measure the latent variable "perceived behavioral control (PBC)" in this study.…”

“…This is because private companies might be hesitant towards participating in PPP projects if the government usually does not comply with PPP contracts. Second, as the chief regulator of the PPP market, the government has huge responsibilities of helping to create a fair and competitive PPP market [7,58,59], enacting relevant legislation and policies [61,65,69,78,87,[95][96][97][98], allocating risks appropriately between itself and private companies [63,65,70,77,79,97,[99][100][101][102], and providing financial assistance to private companies to help them become involved in PPP projects [16,63,66,73,82,103]. Thus, eight observable variables, "help create a fair and competitive PPP market (GI1)", "complete legislations and workable policies (GI2)", "full compliance with PPP contracts (GI3)", "government financial assistance (GI4)", "active coordination between private companies and financial sectors (GI5)", "appropriate allocation of risks between government and private sector (GI6)", "tax incentives (GI7)", and "limited intervention to the implementation of PPP projects (GI8)", were proposed to measure the latent variable of "governmental influence (GI)".…”

Private‐sector partner selection for public‐private partnership projects of electric vehicle charging infrastructure

“…Some earlier studies focused on the importance of the lowest tender price to win a contract . Studies have also acknowledged that a long‐term relationship and partnership is one of the main success criteria for infrastructure development . examined factors such as profitability and project experience in the context of the Chinese PPP experience.…”