Selection Of Capital Structure Of Public Private Partnership Projects: A Sustainability Perspective

Scientific capital structure is the key to guarantee sufficient funds and achievement of objectives of Public–Private Partnership(PPP)projects,while inappropriate capital structure has caused the failure of many projects.Meanwhile,sustainability is an important concept that should be concerned during the life-cycle of PPP projects.Therefore,this study aimed to:(1)identify the critical factors influencing the capital structure of PPP projects from a sustainability perspective;(2)analyze the relationships between the factors and the capital structure based on qualitative comparative analysis(QCA)to build a framework;(3)develop multi-objective model to determine the capital structure of PPP projects;and(4)build a process that combines quantitative calculation with qualitative analysis to achieve scientific selection of the capital structure from a sustainability perspective.This study identified seven critical factors influencing the capital structure of PPP projects,including benefit,project condition,external situation,cost,ability of private sector,government support and risk.Considering the sustainability,the non-economic indicators should be concerned as well as the economic indicators.Thus,proper capital structure not only provides ample funds but also promotes the long-term healthy operation of projects and creates positive effects on the industry,region and society.The findings indicated that benefit,cost and project condition were the top critical factors.Then,based on the framework of analyzing capital structure of PPP projects from a sustainability perspective,the multi-objective model achieved quantitative calculation of equity-debt ratio and equity investment ratio of the private sector,while the process combined qualitative analysis with quantitative model helped the scientific selection of the capital structure of PPP projects considering the sustainability.This study enriches the theoretical research about the capital structure of PPP projects and offers a new idea about the integration of sustainability and PPP projects.In addition,it supports the reasonable selection of capital structure in practice with the process and promotes the practical application of sustainability on PPP projects.