Enhancing Trust Between PPP Partners: The Role of Contractual Functions and Information Transparency

Abstract

Contracts are essential for managing the relationship among public–private partnership (PPP) partners. However, the impact of contracts on the trust between partners is unclear, especially in PPP projects. From the multifunctional perspective of contracts, this study aims to investigate how different dimensions of contractual functions affect distinct types of trust and the moderating role of information transparency between them. The empirical results of the data collected from Chinese PPP professionals show that the three dimensions of contractual functions have positive effects on trust, including goodwill trust and competence trust. However, contractual adaptation has the strongest impact. Moreover, information transparency positively moderates the relationship between contractual control, adaptation, and trust. This study provides new insights on contracts and trust in PPP projects. It can guide PPP project partners to value the process of contract design and information disclosure to cultivate specific types of trust.

Effective Evolutionary Principles for System-of-Systems: Insights from Agent-Based Modeling in Vehicular Networks

“…We posit that this principle augments the interactive behavior among agents by modulating specific factors. Prior studies have corroborated the efficacy of augmented information transparency in bolstering trust within constituent systems [71][72][73], especially in analogous distributed SoSs [74]. Additionally, increased transparency has been shown to bolster the efficiency of knowledge support, subsequently amplifying the innovative capacity of organizational members [75].…”

Developing a conceptual partner selection framework for matching public–private partnerships of rural energy internet project using an integrated fuzzy AHP approach for rural revitalization in China

“…Wang et al [ [ 28 ]] used literature research and expert interviews and other methods to build an indicator system for partner selection, determined the weight of indicators with ANP method, and proposed reasonable allocation of weights according to their importance, which played a certain guiding role in the selection of partners in practice. Chen et al [ [ 29 ]] analyzed the role of contract functions and information transparency in PPP project cooperation, and believed that the efficient selection of partners could be promoted by strengthening trust among procurement partners. Hu et al [ [ 30 ]] identify the financial risks of PPP projects to compensate for the failure in financial risks between the government and SPV due to the lack of control over financial risks.…”

Matching Task Complexity With Supplier Management to Enhance Outsourcing Performance

“…The contractual functions provide a basis for mutual post-negotiation, leading to effective negotiation results (Cheng et al, 2021). Thus, a precise contract is more likely to prevent renegotiation costs responsibilities, and obligations will be fulfilled.…”

“…However, if the outsourcers indicate clear measurements of performance in the contract, detailing both parties’ responsibilities and obligations, the difficulty of performance measurement could be reduced to some extent (Fjermestad & Saitta, 2005). Furthermore, by specifying the clauses of post-negotiation to the parts of the contract, suppliers’ opportunistic behaviors that occur from outsourcing tasks with high complexity can be reduced (Cheng et al, 2021), develop partnerships (Lee et al, 2018) and provide a basis for future negotiation (Cheng et al, 2021). Thus, the negative impact of task complexity on outsourcing performance can be moderated by the control and coordination of contractual governance.…”