Influencing Factors on Profit Distribution of Public-Private Partnership Projects: Private Sector’s Perspective

Abstract

As an important issue in the public-private partnership (PPP) projects, the profit distribution has a critical impact on both the public and private sectors. Moreover, the influence of the private sector on the profit distribution of PPP projects cannot be ignored because the private sector are the implementers of PPP projects and responsible for the life-cycle performance and management of PPP projects. Therefore, this study aims at (1) investigating the influencing factors of the profit distribution of PPP projects from the private sector’s perspective and (2) analyzing the relationships between the factors and the profit distribution by the qualitative comparative analysis (QCA). The results first showed that the five key influencing factors on the profit distribution from the private sector’s perspective were the risk sharing, financing ability, investment, management ability, and effort level. Moreover, the results indicated that the risk sharing was the most important factor that had a positive impact on the profit distribution. Furthermore, the strong management ability and the high ratio of investment were identified as critical factors that led to a larger proportion of profits distributed to the private sector. In addition, the financing ability and the effort level of the private sector should also be considered in the profit distribution plan. The findings first contributed to the body of knowledge on the influencing factors of the profit distribution in PPP projects. In addition, this study is the first attempt of exploring the characteristics of the private sector under the context of profit distribution of PPP projects and using the QCA method to enrich the theoretical research. Thus, the findings would help the private companies improve their abilities and ensure their profits. Besides, the public and private sectors can make appropriate profit distribution proposals in practice based on the conclusion of this study.