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Does government support affect private partners’ profitability in public-private partnerships? Evidence from China

Business

Does government support affect private partners’ profitability in public-private partnerships? Evidence from China

H. Xu

This paper by Han Xu investigates the intriguing contrast of government support's effects on firm profitability within Public-Private Partnerships (PPPs) in China. While joining the national PPP platform boosts profitability by 8.2%, increased government shareholding surprisingly diminishes it by 23.3%. Discover how effective management of government backing can unlock greater benefits from PPPs.

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Playback language: English
Abstract
This paper explores the dual impact of government support on the profitability of firms participating in Public-Private Partnerships (PPPs) in China. Using a conceptual framework and empirical analysis of 555 Chinese A-share listed companies from 2010 to 2019, the study finds that inclusion in the national PPP platform enhances firm profitability by 8.2%, while increased government shareholding reduces profitability by -23.3%. The results suggest that government support should be carefully managed to maximize the benefits of PPPs.
Publisher
Humanities and Social Sciences Communications
Published On
May 09, 2023
Authors
Han Xu
Tags
Government Support
Profitability
Public-Private Partnerships
China
Firm Performance
Shareholding
Empirical Analysis

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