Determinants of public-private partnerships: a state-level empirical analysis of India

Purpose In view of the significance of public-private partnerships (PPPs) as a tool for bridging infrastructure deficits, it becomes imperative to study its determinants. The objective of this paper is to empirically study the determinants of PPPs in India at a subnational level, in terms of both number and value of PPP projects. Design/methodology/approach This study investigates the determinants of value and number of Indian PPPs at a subnational level for the period 2008-2017. The determinants are analyzed using two-step system generalized method of moments (GMM) and negative binomial regression. Select correlates examined are market size, fiscal compulsions, institutional quality, financial sector development and physical infrastructure. Findings The results indicate that fiscal compulsions, financial sector development and physical infrastructure influence PPPs favorably, whereas low institutional quality impacts PPPs adversely. A pertinent finding of this study is that the past value of PPPs lowers the current year's PPP value. Practical implications The findings are expected to assist subnational governments and policymakers in formulating policies that attract more PPP projects (in terms of both value and number). Originality/value This is the first study that analyzes the determinants of infrastructure PPPs at a subnational level in India.