IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v14y2022i21p13972-d954920.html
   My bibliography  Save this article

The Role of Public–Private Partnerships in Local Government Debt Is a Potential Threat to Sustainable Cities: A Case from China

Author

Listed:
  • Liping Fu

    (College of Management and Economics, Center for Social Science Survey and Data, Tianjin University, Tianjin 300072, China)

  • Huajun Sun

    (College of Management and Economics, Center for Social Science Survey and Data, Tianjin University, Tianjin 300072, China)

  • Yuan Meng

    (Department of Public Administration, Chongqing University, Chongqing 400044, China)

  • Jiaxin Li

    (College of Management and Economics, Center for Social Science Survey and Data, Tianjin University, Tianjin 300072, China)

Abstract

(1) Background: Public–private partnerships (PPPs) play an essential role in sustainable cities and are widely applied in the public environment, health, and transportation sectors. One of the main functions of PPP projects is to attract private capital to provide better public services and infrastructure. PPP projects require government investment, potentially threatening the debt of local governments. However, few scholars have shown attention to the relationship between PPP projects and local government debt. (2) Methods: Therefore, this study selects data from 36 cities in China from 2014 to 2018. Ordinary least squares (OLS), quantile regression, and placebo tests are used to investigate this claim. (3) Results: This study finds that PPP projects can affect local governments’ debt; based on this result, this study further proposes that the effect of PPP projects on local government debt has regional heterogeneity. Compared with eastern regions, PPPs in central and western areas of China have a noticeable impact on local government debt. This study also investigates the effect of different types of PPP projects on local government debt. In terms of the number of new additions, comprehensive urban development PPP projects have the largest effect on the exacerbation of government deb. In terms of the amount of new investment, environmental protection PPP projects have the greatest exacerbating effect on government debt. (4) Conclusion: These findings try to identify PPPs’ effect on local government debt. It is of potential reference for sustainable cities and helps to provide better transport, environmental, and health public services.

Suggested Citation

  • Liping Fu & Huajun Sun & Yuan Meng & Jiaxin Li, 2022. "The Role of Public–Private Partnerships in Local Government Debt Is a Potential Threat to Sustainable Cities: A Case from China," Sustainability, MDPI, vol. 14(21), pages 1-20, October.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:21:p:13972-:d:954920
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/14/21/13972/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/14/21/13972/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Yao Yu & Robert Osei‐Kyei & Albert Ping Chuen Chan & Chuan Chen & Igor Martek, 2018. "Review of social responsibility factors for sustainable development in public–private partnerships," Sustainable Development, John Wiley & Sons, Ltd., vol. 26(6), pages 515-524, November.
    2. Nunzia Carbonara & Roberta Pellegrino, 2020. "The role of public private partnerships in fostering innovation," Construction Management and Economics, Taylor & Francis Journals, vol. 38(2), pages 140-156, February.
    3. Xinhua Mao & Jiahua Gan & Xilong Zhao, 2019. "Debt Risk Evaluation of Toll Freeways in Mainland China Using the Grey Approach," Sustainability, MDPI, vol. 11(5), pages 1-17, March.
    4. Jie Tan & Jerry Zhirong Zhao, 2021. "Explaining the adoption rate of public-private partnerships in Chinese provinces: a transaction cost perspective," Public Management Review, Taylor & Francis Journals, vol. 23(4), pages 590-609, April.
    5. Lea Fobbe, 2020. "Analysing Organisational Collaboration Practices for Sustainability," Sustainability, MDPI, vol. 12(6), pages 1-21, March.
    6. Fan He, 2017. "Comment on “Local Government Debt and Firm Leverage: Evidence from China”," Asian Economic Policy Review, Japan Center for Economic Research, vol. 12(2), pages 233-234, July.
    7. Margherita Pero & Antonella Moretto & Eleonora Bottani & Barbara Bigliardi, 2017. "Environmental Collaboration for Sustainability in the Construction Industry: An Exploratory Study in Italy," Sustainability, MDPI, vol. 9(1), pages 1-25, January.
    8. Terence Fell & Johanna Mattsson, 2021. "The Role of Public-Private Partnerships in Housing as a Potential Contributor to Sustainable Cities and Communities: A Systematic Review," Sustainability, MDPI, vol. 13(14), pages 1-25, July.
    9. Zhansheng Liu & Yueyue Jiao & Anxiu Li & Ximei Liu, 2021. "Risk Assessment of Urban Rail Transit PPP Project Construction Based on Bayesian Network," Sustainability, MDPI, vol. 13(20), pages 1-23, October.
    10. Ana Marta Oliveira & Margarida Catalão-Lopes & Rui Portugal, 2021. "PPP hospitals: evidence for deliveries and impact of the Caesarean rate in a European country," Public Money & Management, Taylor & Francis Journals, vol. 41(4), pages 296-303, May.
    11. Stefan Verweij & Ingmar van Meerkerk, 2021. "Do public–private partnerships achieve better time and cost performance than regular contracts?," Public Money & Management, Taylor & Francis Journals, vol. 41(4), pages 286-295, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hai Xie & Weikun Zhang & Hanyuan Liang, 2023. "Can Local Government Debt Decrease the Pollution Emission of Enterprises?—Evidence from China’s Industrial Enterprises," Sustainability, MDPI, vol. 15(11), pages 1-20, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Terence Fell & Johanna Mattsson, 2021. "The Role of Public-Private Partnerships in Housing as a Potential Contributor to Sustainable Cities and Communities: A Systematic Review," Sustainability, MDPI, vol. 13(14), pages 1-25, July.
    2. Bin Xue & Bingsheng Liu & Tao Liang & Dong Zhao & Tao Wang & Xingbin Chen, 2022. "A heterogeneous decision criteria system evaluating sustainable infrastructure development: From the lens of multidisciplinary stakeholder engagement," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(4), pages 556-579, August.
    3. Michelle A. Ruíz & Yazmin L. Mack-Vergara, 2023. "Resilient and Sustainable Housing Models against Climate Change: A Review," Sustainability, MDPI, vol. 15(18), pages 1-14, September.
    4. Tavana, Madjid & Khalili Nasr, Arash & Mina, Hassan & Michnik, Jerzy, 2022. "A private sustainable partner selection model for green public-private partnerships and regional economic development," Socio-Economic Planning Sciences, Elsevier, vol. 83(C).
    5. Jorge Fleta‐Asín & Fernando Muñoz, 2021. "Renewable energy public–private partnerships in developing countries: Determinants of private investment," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(4), pages 653-670, July.
    6. Daniel Catalá‐Pérez & María de‐Miguel‐Molina, 2021. "Analyzing Territorial and Sectorial Dimensions of Public–Private Partnerships in Science, Technology, and Innovation policies," Review of Policy Research, Policy Studies Organization, vol. 38(1), pages 113-138, January.
    7. Pisarska Aleksandra, 2019. "Cooperative relations between public higher education institutions: the contextual nature of the process of their creation," Management, Sciendo, vol. 23(2), pages 205-222, December.
    8. Yi Huang & Marco Pagano & Ugo Panizza, 2020. "Local Crowding‐Out in China," Journal of Finance, American Finance Association, vol. 75(6), pages 2855-2898, December.
    9. Mark A. Moore & Aidan R. Vining, 2023. "PPP performance evaluation: the social welfare goal, principal–agent theory and political economy," Policy Sciences, Springer;Society of Policy Sciences, vol. 56(2), pages 267-299, June.
    10. Jonathan Labbe, 2021. "Study of The Relationship Between Public and Private Venture Capitalists in France: A Qualitative Approach," Papers 2110.09098, arXiv.org.
    11. Takatoshi Ito & Kazumasa Iwata & Colin McKenzie & Shujiro Urata, 2017. "China's Financial Transformation: Editors' Overview," Asian Economic Policy Review, Japan Center for Economic Research, vol. 12(2), pages 167-187, July.
    12. Yihang Zhao & Jing Xiong & De Hu, 2023. "Reputation, Network, and Performance: Exploring the Diffusion Mechanism of Local Governments’ Behavior during Inter-Governmental Environmental Cooperation," Land, MDPI, vol. 12(7), pages 1-17, July.
    13. Johan Larsson & Lisa Larsson, 2020. "Integration, Application and Importance of Collaboration in Sustainable Project Management," Sustainability, MDPI, vol. 12(2), pages 1-17, January.
    14. Pieter van Langen & Gerdje Pijper & Pieter de Vries & Frances Brazier, 2023. "Participatory Design of Participatory Systems for Sustainable Collaboration: Exploring Its Potential in Transport and Logistics," Sustainability, MDPI, vol. 15(10), pages 1-43, May.
    15. Jonathan Labbé, 2020. "Study of the relations between public and private capital-investors in France: a qualitative approach [Étude des relations entre capital-investisseurs publics et privés en France : une approche qua," Post-Print hal-03000096, HAL.
    16. Bisola Beatrice Oguejiofor & Ngozi Samuel Uzougbo & Abosede Olusade Kolade & Ahmed Raji & Chibuike Daraojimba, 2023. "Review of Successful Global Public-Private Partnerships: Extracting key Strategies for Effective U.S. Financial Collaborations," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 10(8), pages 312-331, August.
    17. Ioannis-Dimosthenis Ramandanis & Ioannis Politis & Socrates Basbas, 2020. "Assessing the Environmental and Economic Footprint of Electronic Toll Collection Lanes: A Simulation Study," Sustainability, MDPI, vol. 12(22), pages 1-25, November.
    18. Larissa A. R. U. Freitas & Alessandra Magrini, 2017. "Waste Management in Industrial Construction: Investigating Contributions from Industrial Ecology," Sustainability, MDPI, vol. 9(7), pages 1-17, July.
    19. Schmitz, Patrick W., 2021. "Contracting under adverse selection: Certifiable vs. uncertifiable information," Journal of Economic Behavior & Organization, Elsevier, vol. 182(C), pages 100-112.
    20. Xue Xu & Min Zhao & Xiaoya Li & Chao Song, 2022. "A Study on the Risk Assessment of Water Conservancy Scenic Spot PPP Projects," Sustainability, MDPI, vol. 14(24), pages 1-23, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:14:y:2022:i:21:p:13972-:d:954920. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.