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Government-business relationships as a mechanism: How does participation in PPP projects contribute to the profits of Chinese listed companies?

Author

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  • Jiang, Yutian

Abstract

The Public-Private Partnership (PPP) is a policy framework designed to facilitate the provision of public goods through collaboration between the public and private sectors. Companies engage in PPP projects to generate profit, and the government-business relationship significantly affects this process when the objectives of both parties are not aligned. This article aims to investigate whether participation in PPP projects enhances company profits and to explore the mechanisms of government-business relationships in this process, with a focus on the private sector. This article finds that participation in PPP projects promotes company profits and identifies three key characteristics of Chinese government-business relationships that serve as the underlying mechanisms. First, private companies are somewhat more likely to benefit than state-owned or collective companies. Second, companies’ participation in PPP projects helps the government mitigate financial risks. Third, government service and business environment positively impact companies’ profits through PPP projects. In conclusion, companies’ participation in PPP projects enhances their profitability under government-business relationships.

Suggested Citation

  • Jiang, Yutian, 2026. "Government-business relationships as a mechanism: How does participation in PPP projects contribute to the profits of Chinese listed companies?," Economic Analysis and Policy, Elsevier, vol. 91(C), pages 575-586.
    • Handle: RePEc:eee:ecanpo:v:91:y:2026:i:c:p:575-586
    DOI: 10.1016/j.eap.2026.01.034
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    Keywords

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    JEL classification:

    • C00 - Mathematical and Quantitative Methods - - General - - - General
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H40 - Public Economics - - Publicly Provided Goods - - - General

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