Does government support affect private partners’ profitability in public–private partnerships? Evidence from China

Abstract Infrastructures based on the idea of public–private partnership (PPP) contributes to promoting infrastructure investments, improving public services, and satisfying social demands worldwide over last thirty years. Public sector support is a crucial factor in attracting private sector. However, little known about effect investors’ profitability. Utilizing conceptual framework empirical analysis, this paper, we explore dual impact government PPP firm Our model shows that while compliant can theoretically enhance firm’s profitability, some supportive behavior may harm Employing unique comprehensive project-level firm-level data 555 Chinese A-share listed companies from 2010 2019 new variables measure support, find inclusion national platform profitability by 8.2%, increased shareholding reduces significantly −23.3%. results imply should reasonably projects. study extends literature role