What are the influencing factors of government’s trust decision-making on private sector in PPP projects: evidence from China?

Abstract

Purpose The purpose of this paper is twofold: first, it explores the influencing factors of the government’s trust decision-making in the private sector; second, it explores how these influencing factors affect the government’s trust decisions. Design/methodology/approach A theoretical model was established, and a questionnaire survey was conducted among 152 professionals. The collected datas were analyzed by the structural equation modeling (SEM) method. Findings The study identified four critical factors that influence the government’s decision to trust the private sector in public-private-partnership (PPP) projects. All the four factors have a positively correlated impact on the government’s trust decision-making. The structural equation path analysis shows that the most important factor affecting the government’s trust decision-making is the trustee’s (private sector) trustworthy characteristics, and the path coefficient is 0.92. The path coefficients of risk perception and the trustor’s trust tendency are 0.83 and 0.74, respectively. The influence of the legal system environment on government trust decision-making is moderate, with a path coefficient of 0.68. Originality/value This paper contributes to the literature in two aspects. First, the factors influencing decision-making to government trust in the private sector in PPP projects have been identified. Second, a comprehensive view of the mechanism of government trust in the private sector in PPP projects has been theorized by the SEM method.