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Policy Perspective on Governmental Implicit Debt Risks of Urban Rail Transit PPP Projects in China: A Grounded Theory Approach

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  • Yajing Zhang

    (School of Economics and Management, Nanjing Institute of Technology, Nanjing 211167, China)

  • Weijian Jin

    (School of Economics and Management, Nanjing Institute of Technology, Nanjing 211167, China)

  • Jingfeng Yuan

    (College of Civil Engineering, Southeast University, Nanjing 211189, China)

Abstract

Public–private partnership (PPP) projects have the features of extended investment cycles, diminished returns, and high demand for technology. Inadequate utilization of these projects may result in an accumulation of new implicit debt for the government. Consequently, it becomes imperative for the government to manage and mitigate implicit debt risks associated with urban rail transit PPP projects, which is a crucial prerequisite for ensuring the progression of such projects and the unhindered functioning of the financial system. The objective of this study is to investigate the factors that influence government implicit debt risks in urban rail transit PPP projects from the perspective of policy. This study employs the grounded theory method to develop a comprehensive framework model that identifies the influencing factors of government implicit debt risk in urban rail transit public–private partnership (PPP) projects. The contributions of this study are twofold: (1) it highlights the role of policy as a significant determinant of implicit debt risks of urban rail PPP projects, which contain governmental subsidies, external environmental risk sharing, and supporting measures. Specifically, government subsidies directly contribute to the government’s implicit expenses, thereby impacting the level of implicit debt risks associated with urban rail transit PPP projects. Supporting measures exert an indirect influence on the implicit debt risks of the government, thereby imposing a significant burden on local fiscal expenditure. External environmental risk sharing, as an external factor, leads to an increase in fiscal expenditure due to the government’s social responsibility; and (2) it provides a qualitative method that examines the government implicit risk factors associated with urban rail trait PPP projects based on grounded theory. The model that examines the influencing factors of government implicit debt risk in urban rail transit PPP projects adopts a policy perspective, which can inform policymakers on a heretofore unexplored adverse effect of guarantee policy.

Suggested Citation

  • Yajing Zhang & Weijian Jin & Jingfeng Yuan, 2023. "Policy Perspective on Governmental Implicit Debt Risks of Urban Rail Transit PPP Projects in China: A Grounded Theory Approach," Sustainability, MDPI, vol. 15(19), pages 1-16, September.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:19:p:14078-:d:1245773
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    References listed on IDEAS

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    1. Shabir Hussain Khahro & Tauha Hussain Ali & Shafiqul Hassan & Noor Yasmin Zainun & Yasir Javed & Shahbaz Aziz Memon, 2021. "Risk Severity Matrix for Sustainable Public-Private Partnership Projects in Developing Countries," Sustainability, MDPI, vol. 13(6), pages 1-15, March.
    2. Gabriel M Ahlfeldt & Arne Feddersen, 2018. "From periphery to core: measuring agglomeration effects using high-speed rail," Journal of Economic Geography, Oxford University Press, vol. 18(2), pages 355-390.
    3. Xu, Xiaofeng & Cui, Xiaodan & Chen, Xiangyu & Zhou, Yichen, 2022. "Impact of government subsidies on the innovation performance of the photovoltaic industry: Based on the moderating effect of carbon trading prices," Energy Policy, Elsevier, vol. 170(C).
    4. Goran Amović & Rado Maksimović & Sonja Bunčić, 2020. "Critical Success Factors for Sustainable Public-Private Partnership (PPP) in Transition Conditions: An Empirical Study in Bosnia and Herzegovina," Sustainability, MDPI, vol. 12(17), pages 1-29, September.
    5. Zhe Cheng & Huanming Wang & Wei Xiong & Dajian Zhu & Le Cheng, 2021. "Public–private partnership as a driver of sustainable development: toward a conceptual framework of sustainability-oriented PPP," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(1), pages 1043-1063, January.
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