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