Determinants of Public–Private Partnerships in Infrastructure in Asia: Implications for Capital Market Development | Asian Development Bank

Determinants of Public–Private Partnerships in Infrastructure in Asia: Implications for Capital Market Development

Publication | August 2018
Determinants of Public–Private Partnerships in Infrastructure in Asia: Implications for Capital Market Development

A well-functioning corporate bond market in developing countries can offer long-term financing to public–private partnership investments in infrastructure development.

This paper investigates how financial accessibility to private sectors such as stocks, bonds, and bank loans encourage public–private partnership (PPP) investments in developing countries. It extends existing studies on known determinants of PPPs and analyzes data using the World Bank Private Participation in Infrastructure database. Results reveal further factors that stimulate PPPs and the most relevant determinants of PPP investments. Recommendations call for an optimal risk- and profit-sharing mechanism that can strike a balance between the public nature of infrastructure investments and viability for private financing. There is also a need to further develop bond markets to help provide long-term funding for infrastructure investments.

Contents 

  • Introduction
  • Overview of Public–Private Partnership in Infrastructure Financing
  • Literature Review
  • Data and Empirical Analysis
  • Conclusion
  • Appendix: Variable Definition