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Critical Factors on the Capital Structure of Public–Private Partnership Projects: A Sustainability Perspective

Author

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  • Jing Du

    (Department of Construction and Real Estate, School of Civil Engineering, Southeast University, Nanjing 210096, China)

  • Hongyue Wu

    (Department of Construction and Real Estate, School of Civil Engineering, Southeast University, Nanjing 210096, China)

  • Xianbo Zhao

    (School of Engineering and Technology, Central Queensland University, Sydney 2000, Australia)

Abstract

Scientific capital structure is the key to guarantee sufficient funds and achievement of objectives of Public–Private Partnership (PPP) projects, while inappropriate capital structure has caused the failure of many projects. Meanwhile, sustainability is an important concept that should be concerned during the life cycle of PPP projects. Therefore, this study aimed to: (1) identify the critical factors influencing the capital structure of PPP projects from a sustainability perspective; and (2) analyze the relationships between the factors and the capital structure based on qualitative comparative analysis (QCA). This study identified seven critical factors influencing the capital structure of PPP projects. Moreover, the non-economic indicators should be concerned as well as the economic indicators. Thus, proper capital structure not only provides ample funds but also promotes the long-term healthy operation of projects and creates positive effects on the industry, region and society. Furthermore, the findings indicated that benefit, external situation, cost, ability of private sector and government support were the top critical factors. In addition, although risk did not show great importance, it had close relationship with other factors, which means risk should be concerned comprehensively. This study enriches the theoretical research about the capital structure of PPP projects and offers a new idea about the integration of sustainability and PPP projects. In addition, it supports the reasonable selection of capital structure in practice and promotes the practical application of sustainability on PPP projects.

Suggested Citation

  • Jing Du & Hongyue Wu & Xianbo Zhao, 2018. "Critical Factors on the Capital Structure of Public–Private Partnership Projects: A Sustainability Perspective," Sustainability, MDPI, vol. 10(6), pages 1-27, June.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:6:p:2066-:d:153075
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    Cited by:

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    2. Guang-Xin Gao, 2018. "Sustainable Winner Determination for Public-Private Partnership Infrastructure Projects in Multi-Attribute Reverse Auctions," Sustainability, MDPI, vol. 10(11), pages 1-20, November.
    3. Liu, Huimin & Song, Shuang & Hu, Yi & Yan, Xue, 2020. "Monte-Carlo optimization model for dynamic capital structure adjustment in Chinese public-private partnerships under revenue uncertainty," Transportation Research Part A: Policy and Practice, Elsevier, vol. 142(C), pages 115-128.
    4. Long Li & Zhongfu Li & Lei Jiang & Guangdong Wu & Daojin Cheng, 2018. "Enhanced Cooperation among Stakeholders in PPP Mega-Infrastructure Projects: A China Study," Sustainability, MDPI, vol. 10(8), pages 1-16, August.
    5. Yanhong Liang & Hongdi Wang, 2019. "Sustainable Performance Measurements for Public–Private Partnership Projects: Empirical Evidence from China," Sustainability, MDPI, vol. 11(13), pages 1-15, July.
    6. Jing Du & Hongyue Wu & Ruoyu Jin, 2019. "Capital Structure of Public–Private Partnership Projects: A Sustainability Perspective," Sustainability, MDPI, vol. 11(13), pages 1-25, June.
    7. Anna Wojewnik-Filipkowska & Joanna Węgrzyn, 2019. "Understanding of Public–Private Partnership Stakeholders as a Condition of Sustainable Development," Sustainability, MDPI, vol. 11(4), pages 1-16, February.
    8. Bugalia, Nikhil & Maemura, Yu & Dasari, Rohit & Patidar, Manoj, 2023. "A system dynamics model for effective management strategies of High-Speed Railway (HSR) projects involving private sector participation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 175(C).
    9. Xueguo Xu & Tingting Xu & Meizeng Gui, 2020. "Incentive Mechanism for Municipal Solid Waste Disposal PPP Projects in China," Sustainability, MDPI, vol. 12(18), pages 1-16, September.
    10. Cheng Chen & Dan Li & Caixia Man, 2018. "Toward Sustainable Development? A Bibliometric Analysis of PPP-Related Policies in China between 1980 and 2017," Sustainability, MDPI, vol. 11(1), pages 1-25, December.

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