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

Jing Du (), Hongyue Wu () and Xianbo Zhao ()
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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

Sustainability, 2018, vol. 10, issue 6, 1-27

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.

Keywords: Public–Private Partnership (PPP); sustainability; capital structure; critical factors (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
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