Analyzing the effect of public private partnership mode on sewage treatment in China

Abstract

The public–private partnership (PPP) mode is one of the main ways to promote environmental governance through marketization in the sewage treatment industry. This mode is crucial for environmental protection and livelihood improvement. In order to investigate the impact of PPP mode on sewage treatment, the influence of financial development and the government–business relationship on the effectiveness of sewage treatment under PPP mode, and the role of government in this context, an empirical model is established. To achieve this, data from 284 prefecture-level and above cities in China from 2009 to 2017 has been selected as research samples. The total amount of regional sewage treatment PPP projects is used as the proxy variable for participation in the PPP mode. The findings reveal that the PPP mode of sewage treatment effectively reduces the intensity and amount of sewage discharge. Moreover, the results indicate that a higher level of financial development and a more perfect financial system are associated with better sewage treatment effects under the PPP mode. Similarly, a more harmonious government–business relationship and a higher health index of this relationship correspond to improved sewage treatment effects under the PPP mode. The government should actively enhance government transparency, formulate appropriate corporate taxes and fees, clarify the responsibilities and obligations of the government and enterprises, and optimize the business environment in order to optimize the sewage treatment effect of the PPP mode.