IDEAS home Printed from https://ideas.repec.org/a/eee/retrec/v36y2012i1p45-49.html
   My bibliography  Save this article

The use of PPP's and the profitability rate paradox

Author

Listed:
  • Bonnafous, Alain

Abstract

Over the past twenty years growth in the use of PPPs for new infrastructures has signalled a significant change which completely redefines the issues of public economics in the field of transport policy. This paper concerns the optimal casting between public sphere and private operators. The analysis is based on relationships linking for each project the subsidy rate, the internal rate of return (IRR) and the additional IRR provided to the operator by subsidies. The need for subsidy appears as an increasing function of this additional IRR. Nevertheless, the gradient of the curve decreases in a marked manner. This concavity has some policy oriented consequences.

Suggested Citation

  • Bonnafous, Alain, 2012. "The use of PPP's and the profitability rate paradox," Research in Transportation Economics, Elsevier, vol. 36(1), pages 45-49.
    • Handle: RePEc:eee:retrec:v:36:y:2012:i:1:p:45-49
    DOI: 10.1016/j.retrec.2012.03.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0739885912000236
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.retrec.2012.03.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bonnafous, Alain, 2010. "Programming, optimal pricing and partnership contract for infrastructures in PPPs," Research in Transportation Economics, Elsevier, vol. 30(1), pages 15-22.
    2. Alain Bonnafous, 2002. "Les infrastructures de transport et la logique financière du partenariat public-privé : quelques paradoxes," Revue Française d'Économie, Programme National Persée, vol. 17(1), pages 173-194.
    3. Paul H. Malatesta & Kathryn L. DeWenter, 2001. "State-Owned and Privately Owned Firms: An Empirical Analysis of Profitability, Leverage, and Labor Intensity," American Economic Review, American Economic Association, vol. 91(1), pages 320-334, March.
    4. Alain Bonnafous & Pablo Jensen, 2005. "Ranking Transport Projects by their Socioeconomic Value or Financial Interest rate of return?," Post-Print halshs-00079721, HAL.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Francesco Parola & Jasmine Siu Lee Lam, 2018. "An empirical investigation of logistics infrastructure projects in emerging economies," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 20(1), pages 48-71, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bonnafous, Alain, 2015. "The economic regulation of French highways: Just how private did they become?," Transport Policy, Elsevier, vol. 41(C), pages 33-41.
    2. Alain Bonnafous & Bruno Faivre d'Arcier, 2013. "The conditions of efficiency of a PPP for public finances," Post-Print halshs-00876446, HAL.
    3. Alain Bonnafous & Pablo Jensen, 2005. "Ranking Transport Projects by their Socioeconomic Value or Financial Interest rate of return?," Post-Print halshs-00079721, HAL.
    4. William Roy, 2005. "Évaluation des programmes d'infrastructure : ordre optimal de réalisation sous contrainte financière," Post-Print halshs-00003971, HAL.
    5. Bonnafous, Alain, 2010. "Programming, optimal pricing and partnership contract for infrastructures in PPPs," Research in Transportation Economics, Elsevier, vol. 30(1), pages 15-22.
    6. Alain Bonnafous & Pablo Jensen & William Roy, 2006. "Le cofinancement usager - contribuable et le partenariat public-privé changent les termes de l'évaluation des programmes d'investissement public," Economie & Prévision, La Documentation Française, vol. 0(4), pages 15-30.
    7. Alain Bonnafous, 2005. "Infrastructure Funding and Public-Private Partnerships," Post-Print halshs-00079768, HAL.
    8. Haikun Zhu, 2018. "Social Stability and Resource Allocation within Business Groups," Working Papers Series 79, Institute for New Economic Thinking.
    9. Bozec, Richard, 2004. "L’analyse comparative de la performance entre les entreprises publiques et les entreprises privées : le problème de mesure et son impact sur les résultats," L'Actualité Economique, Société Canadienne de Science Economique, vol. 80(4), pages 619-654, Décembre.
    10. Carlo Cambini & Yossi Spiegel, 2016. "Investment and Capital Structure of Partially Private Regulated Firms," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 25(2), pages 487-515, April.
    11. Musso, Enrico & Ferrari, Claudio & Benacchio, Marco, 2006. "Port Investment: Profitability, Economic Impact and Financing," Research in Transportation Economics, Elsevier, vol. 16(1), pages 171-218, January.
    12. Ullah, Barkat, 2021. "Does innovation explain the performance gap between privatized and private firms?," Journal of Economics and Business, Elsevier, vol. 113(C).
    13. Lu, Susan Feng & Dranove, David, 2013. "Profiting from gaizhi: Management buyouts during China’s privatization," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 634-650.
    14. Carvalho, Augusto & Guimaraes, Bernardo, 2018. "State-controlled companies and political risk: Evidence from the 2014 Brazilian election," Journal of Public Economics, Elsevier, vol. 159(C), pages 66-78.
    15. Bernard, Jean-Thomas & Dupéré, Marc & Roland, Michel, 2003. "International Competition between Public or Mixed Enterprises," Cahiers de recherche 0301, Université Laval - Département d'économique.
    16. Randall Morck & Lloyd Steier, 2005. "The Global History of Corporate Governance: An Introduction," NBER Chapters, in: A History of Corporate Governance around the World: Family Business Groups to Professional Managers, pages 1-64, National Bureau of Economic Research, Inc.
    17. Abhay S. Nagale, 2017. "Performance Differential between India's State Owned Ratna Companies and Private Owned Enterprises," International Journal of Economics and Financial Issues, Econjournals, vol. 7(6), pages 138-140.
    18. Rodríguez-Pose, Andrés & Zhang, Min, 2020. "The cost of weak institutions for innovation in China," Technological Forecasting and Social Change, Elsevier, vol. 153(C).
    19. Ang, James & Knill, April & Mauck, Nathan, 2017. "Cross-border opportunity sets: An international empirical study based on ownership types," Global Finance Journal, Elsevier, vol. 33(C), pages 1-26.
    20. Philippe De Donder, 2005. "L'entreprise publique en concurrence : les oligopoles mixtes," Revue Française d'Économie, Programme National Persée, vol. 20(2), pages 11-50.

    More about this item

    Keywords

    Public investment; Subsidy; Public–private partnership;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H4 - Public Economics - - Publicly Provided Goods
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:retrec:v:36:y:2012:i:1:p:45-49. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/620614/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.