The Impact of Participation in PPP Projects on Total Factor Productivity of Listed Companies in China

Guangxi Cao,Xiangdong Liu

doi:10.3390/su13147603

Abstract

The key to transforming China’s economy from high-speed growth to high-quality development is to improve total factor productivity (TFP). Based on the panel data of China’s listed companies participating in PPP (Public–Private Partnerships) projects from 2010 to 2019, this paper constructs the time-varying DID method to test the impact of participation in PPP projects on the company’s TFP empirically, explore the mechanism of the effect of participation in PPP projects on the company’s TFP, and then conduct heterogeneous analysis from four perspectives: region, industry, ownership form, and operation mode. The empirical results show that participation in PPP projects can significantly promote the growth of the company’s TFP, which mainly comes from the promotion of the innovation level of listed companies and the alleviation of financing constraints by participating in PPP projects. In addition, participation in PPP projects has a significant impact on TFP of listed companies in the eastern region, listed companies in the secondary and tertiary industries, state-owned listed companies, and listed companies participating in PPP projects under the BOT mode.

Highlights

With the rapid growth of the working population and the vigorous promotion of reform and opening-up policies, China’s economy has achieved high growth
The incremental contribution of this paper is as follows: firstly, this paper analyzes the mechanism of the impact of participation in PPP projects on the company’s total factor productivity (TFP), enriches the literature on the incentive mechanism of social capital participation in PPP projects, and improves the intersection theory of the PPP model and TFP; secondly, this paper adopts the DID(differences-in-differences) method to test the impact of participation in PPP projects on the company’s TFP and its heterogeneity, which expands the research on the impact factors of the company’s TFP and provides some reference for the government to formulate policies and companies to form strategic plans
The result shows that the coefficient of the “did” variable is 0.209 and passes the 1% significance test, which further proves that participation in PPP projects has a significant positive correlation with the company’s TFP

Summary

Introduction

With the rapid growth of the working population and the vigorous promotion of reform and opening-up policies, China’s economy has achieved high growth. Sustainability 2021, 13, 7603 model can effectively alleviate the financial pressure and debt pressure of local governments through the participation of social capital [2], reduce the government’s debt ratio [3], and can significantly promote the development of the real economy in the long run [4]. The incremental contribution of this paper is as follows: firstly, this paper analyzes the mechanism of the impact of participation in PPP projects on the company’s TFP, enriches the literature on the incentive mechanism of social capital participation in PPP projects, and improves the intersection theory of the PPP model and TFP; secondly, this paper adopts the DID(differences-in-differences) method to test the impact of participation in PPP projects on the company’s TFP and its heterogeneity, which expands the research on the impact factors of the company’s TFP and provides some reference for the government to formulate policies and companies to form strategic plans.

Research on TFP

Research on the Impact of Participation in PPP Projects on Companies

Improve the Level of Innovation

Alleviate Financing Constraints

Model Construction

Variable Description

Data Sources

Benchmark Regression

Parallel Trend Test

Parallel

Robustness Test

Mechanism Test