Local Financial Market Research Articles

The impact of judicial prejudice in bankruptcy on creditors and local financial development

In this research, we explore the implication of judicial prejudice in bankruptcy for creditor interests and local financial market development. Based on prefecture-level data, we find compelling evidence that judicial prejudice leads to capital market frictions. Regions with stronger judicial prejudice have higher borrowing costs. Moreover, judicial prejudice is negatively related to local financial market development. In sum, our research sheds light on the impact of judicial prejudice on financial market development.

Fiscal asymmetries and debt crises: Evidence from Lebanon using a sign restricted structural VAR model

This study identifies empirically Lebanon's fiscal asymmetries and shocks and traces their effects on GDP using a sign-restricted structural VAR approach. Following Arias et al.’s (2018) identification procedure of sign and zero restrictions, our empirical findings point to a sluggish effect of fiscal policy on economic activity, stipulating that fiscal policy is conducted with non-Keynesian features. The study also documents evidence in favor of crowding out effects given that central government's borrowings are mainly from the local financial market. Moreover, with a non-Keynesian effect of fiscal policy, policy makers should refrain from using fiscal tools to counteract business-cycle fluctuations. It is shown that in order to break through government expenditure's inefficiency, the government must curb a rising budget deficit, which is harnessing an increasing cost of capital and impinging negatively on debt and its service. A rising sovereign debt, in turn, has subsequently triggered a sovereign debt crisis in October 2019.

The land degradation neutrality management enablers, challenges, and benefits for mobilizing private investments in Pakistan

Limited investments in land degradation neutrality (LDN) are causing environmental degradation and are the main barriers to socioeconomic development worldwide. Therefore, it is crucial to meet the target 15.3 of the Sustainable Development Goals to achieve soil neutrality by 2030 at the national level. Therefore, the primary purpose of this study is to find critical enablers, challenges, and benefits of LDN and develop a new administrative management framework for mobilizing private investments according to local financial market conditions. To achieve this research objective, the authors selected 14 degraded districts in four provinces of Pakistan. The data for this study were collected from 63 institutions that were directly or indirectly involved in land degradation risk prevention and management. The research evaluation process comprises a mixed-method approach to infer institutional survey data analysis. The interpretation of the results was based on two important dimensions, including 12 survey statements. From the perspective of LDN management (LDNM) enablers, the government’s long-term vision and strong commitment were validated as top-ranked measures among the six enablers for the implementation of LDN. The development of horizontal and vertical coordination mechanisms for the LDN is the second-most critical enabler. While developing public-private partnership (PPP) policies, procedures and services are perceived as the third most potent enabler. In terms of LDNM challenges and benefits, raising awareness of the LDN concept, capacity development, and LDN market risk assessment are identified as the main challenges. However, developing a green economy, securing social needs, and ensuring ecological sustainability are vital benefits. This study makes theoretical and practical contributions to the field of LDNM. Theoretically, this study contributes to the LDNM framework based on complexity theory by integrating transaction cost logic to execute win-win PPP agreements. Practically, to meet different market conditions, this study suggests three PPP models: special credit lines, risk-sharing facilities, and land protection performance contracts. These inputs will provide insight into what the government needs to develop for land use policy, promote LDN investments, and forge new partnerships between local financial institutions and landscape stakeholders.

Regional Private Financing Risk Index Model Based on Private Financing Big Data.

With the rapid development of China's economy in recent decades, and the decentralization of the country's economic regulation and legal support, private financing has developed rapidly due to its simple, flexible and unique advantages. Some SMEs can solve it to some extent through private financing. The company's own financing issues have also helped the local financial market's effectiveness. Based on the “Yantai Private Financing Interest Rate Index,” this paper constructs a private financial risk index model from three perspectives of interest rate risk, scale risk and credit risk, and conducts a case simulation analysis of the private financing risk index. The characteristic indicators of the early warning system are screened from the macro, micro and stability dimensions, and subjective and objective adjustment coefficients are set for each indicator from both subjective and objective perspectives. This article takes the Yantai Index as the representative of China's private financing interest rate index. Based on the term structure of Yantai's private lending rate, this paper studies its response to macroeconomic shocks and analyzes the information value it contains. And use the private financing interest rate index to build a financial risk monitoring model. Through the system transformation model, the article finds that there is a significant asymmetry in the response of private lending to macroeconomic shocks. When private lending rates are higher, inflation has a greater effect on interest rates; when private lending rates are lower, monetary policy has a stronger regulatory effect on private lending rates. In the data processing, the principal component analysis method and the Bayesian vector autoregressive model were established. Through the study of this article, it is concluded that the interest rate decreases with the increase of the term, and the risk comparison is performed for the 1-month period, 3-month period, June period, 1-year period, and more than 1-year. The risks in the previous period are greater, and the risks in the March and June periods are relatively small. This model can be used to calculate the comprehensive evaluation value and its fluctuation in the historical risk market and historical equilibrium market, so as to determine the risk range of the comprehensive evaluation value. Thus, the early warning system is verified to be feasible.

The Impact of the Local Financial Market on Economic Growth: A Case Study of Kazakhstan

Kazakhstan’s financial market has always been the focus of the government attention as an important element of country development. Therefore, the main goal is to build a well-developed, competitive and trustworthy financial market that has a dominant influence on the economy and sustainable development. Nevertheless, this statement is true for economies that have reached a certain level of development. For countries with economies in transition, achievement of a significant level of economic growth is a prerequisite for the formation of a stable capital market and banking system, that will subsequently have a significant positive impact on economic growth. This study investigates the relationship between the local financial market and economic growth for Kazakhstan based on measures of economic growth and its components, as well as empirical indicators of banking development and stock market — size, liquidity and volatility — used as control variables that determine Kazakhstan’s economy. Time series regression analysis and Granger causality test was performed for data from 1994 to 2017 in order to design country-specific measures for financial development. The results confirmed the profile of Kazakhstan’s economy by showing that world oil prices and total investment are the most powerful factors influencing economic growth. The direction of causation for Kazakhstan comes from economic growth towards the development of the local financial market, contrary to the postulate that the development of a financial intermediary stimulates economic growth. Therefore, at this stage, the financial sector does not stimulate the economic development of Kazakhstan, but rather the economic growth based on oil production and export is a catalyst for the development of the financial sector. It should be recommended to Kazakhstan’s government to shift the focus from financial market to economic development in order to mobilise sufficient volumes of domestic and international investments to transform the economy and make a transition to sustainable growth.

ՀՀ-ում գործող ՄՖԿ-ների կողմից տեղեկատվական տեխնոլոգիաների կիրառելիությունը և զարգացման հնարավոր ուղղությունները/Applicability and Possible Development Directions of Information Technologies for MFCs Operating in RA

Nowadays, attracting clients in remote regions, high transaction fees for serving such clients, effective exchange of information on institutional level and effective management of the organization are some crucial problems that arise for microfinance companies (hereinafter referred to as MFCs). Information technologies are considered to be one of the best solutions to such problems. Within the framework of the paper local financial market and international analyses were made with the aim of introducing the possibility of submitting micro-borrowings with the help of technologies. Within the framework of the work, a secondary data analysis of developing, as well as developed countries was conducted. In addition a survey was carried out to clarify the possibility of providing credit services through the technologies for the population of the Republic of Armenia. As a result, it was established that middleaged clients, living in rural and urban settlements can be offered online loans through mobile applications. Provision of financial services together with payment and settlement organizations is also considered as a solution for microfinance organizations.

Fiscal policy in times of high debt: tale of Lebanon

ABSTRACT This study empirically identifies fiscal shocks and traces their effect on GDP and its components using structural VAR framework in a highly indebted economy of Lebanon. Empirical findings of this study point to an inefficiency of fiscal policy in stimulating economic activities, stipulating that fiscal policy is conducted with non-Keynesian features. Government expenditure multiplier exhibits near zero effect with magnitude of 0.068 on impact and insignificant otherwise. Also, we document evidence in favor of crowding out effect given central government's borrowings are mainly from the local financial market. Policy implication of this paper is twofold. First, given a non-Keynesian effect of fiscal policy, policy makers should refrain from using fiscal tools to counteract business-cycle fluctuations. Second, in order to break through government expenditure inefficiency, government officials must curb a rising budget deficits to harness an increasing cost of capital and, therefore, impeding potential growth of private sector. Previous fiscal policy practice has invoked concerns about sustainability of public debt time path and triggered a sovereign crisis which has been translated into a BOP crisis.

Volatility transmission within financial markets during the COVID-19 pandemic: are faith-based investors well off in Tunisia?

PurposeThis paper aims to investigate the risk-return and volatility spillover within the Tunisian stock market during the COVID-19 pandemic analyzing both the Islamic and conventional stocks’ performance.Design/methodology/approachBoth symmetric (GARCH and GARCH-M) and asymmetric (Threshold GARCH and Exponential GARCH) models are used to analyze the market returns and volatility response. Standard and Poor’s (S&P) index has been used to test both the Islamic and conventional stocks within the Tunisian stock market.FindingsThe findings suggest that both Tunisia Islamic and conventional stock markets are highly persistent; however, the conventional stock index showed a negative return spillover on the Islamic stocks during the pandemic. The conventional stock index has also shown a higher exposure to risk for a lower amount of return, and evidence of potential diversification benefit between both indexes was found during the pandemic, whereas the Islamic market showed a positive leverage effect, indicating a positive correlation between past return and future return; the conventional index implied a negative leverage effect.Originality/valueThe value of this paper emerges in studying three main aspects that are specific to the Tunisian stock market. This includes COVID-19 effect of return spillovers, volatility transmission across both conventional and Islamic stock market within the local financial market.

«The Beginning of Glorious Deeds…»: Excerpts from the History of Verhneudinsk and Kyakhta Agencies of the Russian-Chinese Bank from 1898 to 1900

The article considers the history of establishment and initial phase of the activity at Verhneudinsk and Kyakhta Agencies of the Russian-Chinese Bank. After succeeding in reaching economic growth of the Russian Empire in the 1890s the state authorities intensified the efforts in the Asian-Pacific region to find new markets for national industrial products. Strengthening the influence in the countries of Inner Asia the autocracy could also solve another important problem of creating conditions for integration of remote Asian areas into the single economic space of the country. The territory of Western Trans-Baikal region became one of these areas. The Trans-Siberian Railway and branches of biggest Russian banks were used as the main tools for reaching the goal. The Russian-Chinese Bank, founded in 1895 and sponsored by the Russian Imperial Government, played a significant role in this process. The bank’s agencies in Verhneudinsk and Kyakhta, opened in 1898, became the first active credit and finance institutions in the region. In spite of some limitations in their legal status, the institutions managed to conduct successful activity on lending for local commerce and industry. The operation of Verhneudinsk and Kyakhta Agencies of the Russian-Chinese Bank laid the basis for its future leadership in the local financial market.

FUNCTIONING OF FINANCIAL INSTITUTIONS AND INSTRUMENTS IN AN UNSTABLE GLOBAL ECONOMY

The current financial and economic outlook from 2020 onwards is a concern worldwide, especially for borrowers with a lower credit score or in industries most affected by the restrictions associated with the spread of the COVID-19 epidemic in the world. Extraordinary budgetary financial and fiscal incentives have helped stabilize the national economies of most countries. The central banks of the developed world and developing countries responded quickly and decisively, providing their own unprecedented support measures. They did so through a variety of policy instruments (liquidity support in the banking system and financial markets, control over foreign exchange interventions, lowering the discount rate, lowering reserve requirements for banks and insurance companies, debt and tax deferrals, soft loans, grants, grants, financial assistance, etc.), which greatly helped to stabilize their markets and maintain their full functioning. In addition, almost all central banks in the developing world have been very active in anti-crisis policies, and about half of them have reduced reserve requirements for banks that provide liquidity to the financial system; also eased lending conditions. About 20 emerging market central banks have first launched quantitative easing - formally known as asset repurchase programs - by buying public and private debt to relieve stress in the economy and help markets function. The analysis shows that these asset repurchase programs have generally proven effective, including by helping to stabilize local financial markets. Following the application of quantitative easing in 2020, the analysis shows that these asset repurchase programs have generally had a positive impact on local financial markets. It is important to note that this has taken place even with the reduction of the discount rate, additional large-scale purchases of assets by the Federal Reserve and a significant recovery in global appetite for risk. In particular, the repurchase of assets by central banks of emerging market countries helped to reduce the yield on government bonds, which did not significantly affect the depreciation of local currencies. They have also gradually helped reduce the stress of the local financial investment market. A positive asset repurchase experience may prompt central banks in more emerging markets to view non-traditional monetary policies as a key part of their policy tools, especially when space for traditional policies is limited. The purchase of assets may be a suitable policy for some central banks depending on the market conditions they face and their ability to successfully implement them. Ukraine also needs to end the harmful effects of chaos and inconsistency in the public sector during the pandemic and to develop a comprehensive strategy to protect the population and business structures from the COVID-19 pandemic, especially those sections of the population and areas of activity that have suffered the most. At the same time, as world experience shows, financial institutions and instruments are one of the key anti-crisis mechanisms that must be actively used to overcome the existing challenges.

A state-owned bank for small farmers in Chile, c.1926-1953

This article deals with the creation and operations of the first agricultural development bank ever created in Chile, the Caja de Crédito Agrario (CCA), founded in 1926, in operations until 1953. The main sources are the annual reports of CCA from 1933 to 1951. The main contributions are to show first that the CCA was instrumental to provide subsidized long-term capital to small farmers in Chile to promote agricultural production, but that also had a “social mission”. The CCA soon became a protagonist within the local financial market. Given the lack of knowledge about the modus operandi of development banks in Latin America, we provide the first account of the management and financial activities of the CCA. We show that the management structure of the firm, and in particular its strategy of decentralization, was key to explain its success. Likewise, the CCA managed successfully to raise increasing amounts of capital from other state institutions at low interest rates, thus being able to cover its increasing loan operations.

The Influence of US Dollar Funding Conditions on Asian Financial Markets

More than 20 years after the Asian financial crisis, the region’s continued high reliance on United States (US) dollar-denominated funding has significant implications for the transmission of global financial conditions to domestic financial and macroeconomic circumstances. Given limited domestic capital market-based financing solutions, a high reliance on funding denominated in US dollars renders countries vulnerable to changing global financial and liquidity conditions. Using a dynamic panel and a vector autoregression model to assess the exchange rate as a possible transmission channel, we find that changes in bilateral US dollar exchange rates can have a significant impact on sovereign credit risk. In particular, a depreciation of the domestic currency against the US dollar leads to a widening of the sovereign bond spread. This finding suggests a significant relationship between US dollar funding exposure, US dollar liquidity conditions, and domestic financial conditions in some emerging Asian economies, and thus highlights one source of structural vulnerability. Given that the magnitude of the effects varies across countries, policy makers need to monitor closely the interplay between the exchange rates and local financial market conditions with tailored prescriptions for domestic financial resilience.

Financial Literacy and Demographic Factors in Karachi City of Pakistan

Considering the vigorously dynamic fluctuations in the monetary condition, particularly in financial/budgetary markets, it is urged to improve speculators’ money managing knowledge. Financial proficiency involves making well aware and efficient financial choices. The present examination explores the socio-economic factors defining Pakistani investors’ financial literacy and effects of financial literacy on stock market investment decision. A (questionnaire) survey was developed based on 3 sections: The primary section included the measuring of demographic characteristics of respondents, the secondary was based on measuring financial literacy of respondents, whereas the last section was dedicated to measuring stock market investment decision of respondents.
 Purpose – The motivation behind this study is to evaluate the financial proficiency of individual speculators/investors of the Karachi city of Pakistan who put resources into the Pakistan stock exchange, local financial market in Karachi. Likewise, it inspects the connection between financial education and the participation of the socio-economic-demographic components which influence the investment choice.
 Design/methodology/approach – we articulated a modified questionnaire for our investigation, separated into three sections. The first part of which was dedicated to statistics of demographic factors. The subsequent part highlights factors influencing the speculation choice of the Pakistani speculators. The last section is committed to financial literacy utilizing examination-type, true and false, questions and incorporates 10 questions. Convenient sample of 231 of Pakistani national financial specialists/investors is utilized for this purpose.
 Findings – The outcomes show that the financial literacy of Pakistani speculators’ is relatively higher than the average expected level. The financial education seen to be influenced by salary, sex, and employment status and work place activity. financial education exists paying little heed to the age of the respondents. We observed a “significant difference in the level of financial literacy between groups of respondents as per their sexual orientation. More specifically, females have a lower level of financial education than males. At last, the outcomes show that there is a significant relationship between financial literacy and investment decision. Results likewise show that respondents with higher financial literacy have higher stock holding as compared with those with low financial literacy.”
 Originality/value – The present examination is viewed as significant and unique being one amongst the very few conducted in Pakistan's situation and Pakistani context. As far as we possibly know, no such examinations have been led with respect to estimating financial literacy in Pakistan or the connection between financial literacy level and the variables that influence the investment choices.

State of the art of Islamic finance in Morocco

Islamic finance is now an essential component of global finance. It knows vertiginous growth in several Muslim countries like the Gulf and Southeast Asia countries. It has shown innovation and has been able to set up in several non-Muslim countries where it coexists with conventional finance. Indeed, the increased demand for Islamic financial products has made it nowadays a primordial player that no country can no longer neglect. This is how we will try to focus on the ethical dimension of Islamic finance. Before explicing any issues that it would present for all socio-economic operators in Morocco, particularly to commercial banks, Bank Al -Maghrib, the Treasury and local financial market players. Then we will discuss the opportunities it would provide for its contribution to the financing of the priority sectors for Morocco, the banking of its population and the promotion of social solidarity through the establishment of the funds of the Zakat.

Gender and Financial Misconduct on Fintech: Experimental Evidence from Mobile Money in Ghana

We construct a census of the market for mobile money in village Ghana and estimate that 1 out of every 4 mobile money transactions is overcharged relative to mandated rates. In an experiment, we randomize the matches between vendors and customers, finding strong evidence of “gender misconduct gap”: female vendors are +37% more likely to commit such misconduct relative to male vendors. Misconduct is discriminatory and asymmetric: female customers are relatively more likely to suffer misconduct, and while female vendors discriminate against customers of their gender, male vendors favor their gender. We present evidence suggesting gender differences in empowerment, and beliefs about gender among vendors and customers as relevant mechanisms. Several other possible mechanisms are ruled out empirically. Our findings raise important issues at the intersection of economics and culture, and indicate that preexisting social distance (particularly unequal gender empowerment and gendered beliefs) can incentivize undesirable market outcomes and may be an important source of local financial market frictions.

Misconduct and Reputation under Imperfect Information

Misconduct – market actions that are unethical and indicative of fraud or wrongdoing – is a significant yet poorly understood issue that underlies many economic and financial transactions. Does misconduct in markets matter? When and how does reputation act as a discipline against seller misconduct? We design a field experiment to study the impact of two-sided anti-misconduct information programs on markets, which we deploy on the local markets for mobile money (Human ATMs) in Ghana. We show that, at baseline, these markets are characterized by substantial imperfect information, consumer mistrust, and vendor misconduct. The information programs lead to a large reduction in misconduct (-21 pp = -72%) and as a result, an increase in overall market activity, firm sales revenue, and consumer welfare. We develop a simple sanctioning and moral hazard framework between vendors and consumers that shows the treatment effect is due to a combination of more accurate consumer’ beliefs about misconduct and increased reputation concerns for vendors. Together, our results indicate a potentially significant source of local financial market frictions, where market activities are underprovided due to misconduct and difficulty in building reputation. Social sanctions through reputational impacts can promote formal local markets when formal sanctions are weak.

An Event Study of COVID-19 Central Bank Quantitative Easing in Advanced and Emerging Economies

This paper conducts an event study of 30 quantitative easing (QE) announcements made by 21 central banks on daily government bond yields and bilateral US dollar exchange rates in March and April 2020, in the midst of the global financial turmoil triggered by the COVID-19 outbreak. The paper also investigates the transmission of innovations to long-term interest rates in a standard GVAR model estimated with quarterly pre-COVID-19 data. We find that QE has not lost effectiveness in advanced economies and that its international transmission is consistent with the working of long-run uncovered interest rate parity and a large dollar shortage shock during the COVID-19 period. In emerging markets, the QE impact on bond yields is much stronger and its transmission to exchange rates is qualitatively different than in advanced economies. The GVAR evidence that we report illustrates the Fed's pivotal role in the global transmission of long-term interest rate shocks, but also the ample scope for country-specific interventions to affect local financial market conditions, even after controlling for common factors and spillovers from other countries. The GVAR evidence also shows that QE interventions can have sizable real effects on output driven by a very persistent impact on long-term interest rates.

GENERALIZED AUTOREGRESSIVE CONDITIONAL HETEROSKEDASTICITY MODELING OF ONEYEAR MATURITY GOVERNMENT BONDS OF GREECE DURING SOVEREIGN DEBT CRISIS OF EUROZONE IN 2010

ination of international trade imbalances, the impact of the global crisis from 2007 to 2012, failure in bailout approaches of European governments that troubled banking industries and private bondholders, high-risk lending and borrowing policies enforced by unrestricted credit requirements during the period from 2002 to 2008 and fiscal policy choices related to government revenues and expenses. The objective is to model the boiling state of the Greek local financial market before the peak of the Sovereign Debt Crisis of Eurozone in 2009, modelling the insights of foreign investors and credit rating organizations. We will identify a set of primary risk factors and their effect on both the local economy and the markets involved to validate the analysis done. In this paper will use both statistical analysis and macroeconomic data modelling techniques to identify a set of primary risk factors or economic variables and their effect on both the local economy of Greece and the markets involved. The selected method of modeling is Generalized autoregressive conditional heteroskedasticity models. The research is based on the data provided by World Bank Data Portal. Results obtained are fitted of 2006-2009 years data Autoregressive Conditional Heteroskedasticity (ARCH) and Generalized Autoregressive Conditional Heteroskedasticity (GARCH) models, forecasting market volatility in 2010 and on. We have discovered, that the Auto Regressive Integrated Moving Average model is not suitable for this problem as there was no notable autocorrelation. The volatility seems to fade out. This observation coincides with reality, as the crisis is about to peak and descend. Systemic risk indicators, primarily used for forecasting state-wide risk, are usually built on insider data of rating agencies or financial institutions. In this paper we obtain results close to Systemic Stress Indicator provided by European Central Bank (ECB) using ARCH and GARCH models on public data. The practical importance is model generation principle, which allows creating a risk indicator based on public financial data. Key words: economy, Single Financial Market, macroeconomic models, commodities prices, risk indicators.

CAPITAL IMPLICIT EXPENSES IN THE SHADOW ECONOMIC REVENUE

In many countries related to emerging markets (EM), there is a high proportion of the shadow economy. The main source of shadow incomes replenishment are incomes that are actually generated in the official sector of the economy, however, they are withdrawn to the shadow segment. The article is dedicated to solving the actual task of income amount estimating that flows from the official sector of the economy to the shadow one. The paper shows that the amount of annual profits that "poured" into the shadow sector corresponds to the size of the hidden (implicit) payment for capital. The problem of shadow payment for capital is closely connected with the shadowing of profits, salaries and payments for the resources usage.
 The causal relationship between risk premium, shadow economy and key macroeconomic parameters of individual countries are shown in the article. The average income to GDP per capita ratio in Ukraine and other EM countries is significantly lower than in developed countries. In addition, there is a low share of staff costs in the structure of costs of enterprises. Thus, in the EM countries, the orientation of the business to the interests of the shareholders is clearly manifested and the interests of the stakeholders are ignored. In emerging markets, an increase in risks primarily leads to an increase in the risk premium and the shadowing level, to rising prices and to a substantial reduction in real salaries.
 For the estimation of real capital expenditures, it is advisable to use indirect methods, especially modification of capital assets pricing model (CAPM), adapted to the conditions of the EM. The proposed modification (hybrid crisis model) involves minimum usage of the data from the local financial market. It includes the following parameters: global risk-free rate of return, global market premium for risk, country risk premium, beta-factor, calculated on the basis of the analogue approach, and premium for specific risks of investing in a particular asset. According to our assumption, the shadow interest rate on capital is the difference between the expected return by CAPM and the averaged ROE that follows from the official reporting. Thus, the size of annual profits, "transferred" into the shadow sector, corresponds to the size of the implicit capital charge. The calculations made have showed a stable relationship between the level of country risks and the size of shadow revenues in the country.

Interdependency of the critical success factors and ex-post performance indicators of PPP projects

PurposeThere is lack of literature on the evaluation of PPP projects performance based on critical success factors (CSFs). Thus, the purpose of this paper is to investigate and establish which of the CSFs are good predictor of PPP projects performance in terms of success criteria.Design/methodology/approachA questionnaire survey was developed based on PPP performance indicators and CSFs identified through a rigorous literature review. It was administrated among experts in PPP from the UK and the UAE. The respondents were selected purely on their work experience in PPP projects. The sites for collecting data were selected based on the similarity of the procurement methods between the two countries. The data were initially analysed using descriptive statics to identify the association between CSFs and PPP performance indicators. Multiple regression analysis was used to examine which of the CSFs were significant predictor of PPP projects performance.FindingsThe results demonstrated that “project technical feasibility, social support and local financial market assessment” contribute significantly to time performance. Detailed cost/benefits assessment contributed significantly to the cost, time and quality performance. Appropriate risk allocation and multi-benefit objectives of all stakeholders were found to be significant predictors of the service performance. CSFs “social support and detailed cost/benefits assessment” contribute positively to profit and variation performances. CSFs “profit and transparent procurement” are negatively associated with the variation performance. Cost and quality were the least performance criteria that could be predicted by the factors associated with this study.Practical implicationsThe findings are expected to benefit the upper management of local governments and stakeholders to make informed decisions by understanding the link between the CSFs and the generic performance success measures at the onset of the of PPP project.Originality/valueThis study expands the existing literature by using the CSFs to predict the performance success of PPP projects.