IDEAS home Printed from https://ideas.repec.org/a/eee/transa/v118y2018icp341-359.html
   My bibliography  Save this article

Public private partnerships in the provision of tolled roads: Shared value creation, trust and control

Author

Listed:
  • Chung, Demi
  • Hensher, David A.

Abstract

Public private partnerships are rationalized on shared value creation by combining public sector management and oversight with private sector resources for a direct provision of a public good or service. Yet little is known about what are the sources of value and the effects of contract control mechanisms for value appropriation. This paper explores this issue from the perspectives of both public sector agencies and private sector firms involved in the provision of toll roads. Using data collected from a stated choice experiment on toll road participation to obtain a composite measure of resource values, we find that resource values have little influence on decisions to form a partnership, while partner’s (un)trustworthiness and social activism by external stakeholders have a discernible effect on their decisions. Mitigating controls moderate these influences. An internal coordination framework within the public organization and the enactment of institutional policy can help to reap the most from the combined resources for shared value creation, particularly when trust is yet to be established during the contracting phase.

Suggested Citation

  • Chung, Demi & Hensher, David A., 2018. "Public private partnerships in the provision of tolled roads: Shared value creation, trust and control," Transportation Research Part A: Policy and Practice, Elsevier, vol. 118(C), pages 341-359.
    • Handle: RePEc:eee:transa:v:118:y:2018:i:c:p:341-359
    DOI: 10.1016/j.tra.2018.08.038
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0965856417312053
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tra.2018.08.038?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 search for a different version of it.

    References listed on IDEAS

    as
    1. Edward J. Zajac & Cyrus P. Olsen, 1993. "From Transaction Cost To Transactional Value Analysis: Implications For The Study Of Interorganizational Strategies," Journal of Management Studies, Wiley Blackwell, vol. 30(1), pages 131-145, January.
    2. Lucien Karpik, 2010. "Valuing the Unique: The Economics of Singularities," Economics Books, Princeton University Press, edition 1, number 9215.
    3. Chung, Demi & Hensher, David A. & Rose, John M., 2010. "Toward the betterment of risk allocation: Investigating risk perceptions of Australian stakeholder groups to public-private-partnership tollroad projects," Research in Transportation Economics, Elsevier, vol. 30(1), pages 43-58.
    4. Ilze Kivleniece & Bertrand Quélin, 2012. "Creating and Capturing Value in Public-Private Ties: A Private Actor's Perspective," Post-Print hal-00677772, HAL.
    5. Ranjani Krishnan & Fabienne Miller & Karen Sedatole, 2011. "The Use of Collaborative Interfirm Contracts in the Presence of Task and Demand Uncertainty," Contemporary Accounting Research, John Wiley & Sons, vol. 28(4), pages 1397-1422, December.
    6. Oliver Hart & Andrei Shleifer & Robert W. Vishny, 1997. "The Proper Scope of Government: Theory and an Application to Prisons," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1127-1161.
    7. Costello, Anna M., 2013. "Mitigating incentive conflicts in inter-firm relationships: Evidence from long-term supply contracts," Journal of Accounting and Economics, Elsevier, vol. 56(1), pages 19-39.
    8. Byoun, Soku & Xu, Zhaoxia, 2014. "Contracts, governance, and country risk in project finance: Theory and evidence," Journal of Corporate Finance, Elsevier, vol. 26(C), pages 124-144.
    9. Demi Chung & David A. Hensher, 2015. "Modelling Risk Perceptions of Stakeholders in Public–Private Partnership Toll Road Contracts," Abacus, Accounting Foundation, University of Sydney, vol. 51(3), pages 437-483, September.
    10. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    11. James G. March & Zur Shapira, 1987. "Managerial Perspectives on Risk and Risk Taking," Management Science, INFORMS, vol. 33(11), pages 1404-1418, November.
    12. Demi Chung & David Hensher, 2015. "Risk Management in Public–Private Partnerships," Australian Accounting Review, CPA Australia, vol. 25(1), pages 13-27, March.
    13. Byoun, Soku & Kim, Jaemin & Yoo, Sean Sehyun, 2013. "Risk Management with Leverage: Evidence from Project Finance," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 48(2), pages 549-577, April.
    14. Brian S. Silverman, 1999. "Technological Resources and the Direction of Corporate Diversification: Toward an Integration of the Resource-Based View and Transaction Cost Economics," Management Science, INFORMS, vol. 45(8), pages 1109-1124, August.
    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. Wang, Wei (Walker) & Jin, Xi & Tan, Zhijia & Sun, Huijun & Wu, Jianjun, 2022. "Modeling the effects of government subsidy and regulation on BOT transport project contract design within contractible service quality," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 164(C).
    2. Sanou, Awa & Liverpool-Tasie, Lenis Saweda O. & Caputo, Vincenzina & Kerr, John, 2021. "Introducing an aflatoxin-safe labeling program in complex food supply chains: Evidence from a choice experiment in Nigeria," Food Policy, Elsevier, vol. 102(C).
    3. Baños-Pino, José F. & Boto-García, David & Zapico, Emma, 2021. "Persistence and dynamics in the efficiency of toll motorways: The Spanish case," Efficiency Series Papers 2021/03, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    4. Deborah de Lange, 2023. "Sustainable Transportation for the Climate: How Do Transportation Firms Engage in Cooperative Public-Private Partnerships?," Sustainability, MDPI, vol. 15(11), pages 1-21, May.
    5. Hafiz Syed Mohsin Abbas & Xiaodong Xu & Chunxia Sun & Samreen Gillani & Muhammad Ahsan Ali Raza, 2023. "Role of Chinese government and Public–Private Partnership in combating COVID-19 in China," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(3), pages 727-748, September.

    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. O'Connell, Vincent & Lee, Jong-Ho & O'Sullivan, Don, 2018. "The influence of CEO equity incentives on licensing," European Management Journal, Elsevier, vol. 36(2), pages 266-277.
    2. Ohad Ref & Zur Shapira, 2017. "Entering new markets: The effect of performance feedback near aspiration and well below and above it," Strategic Management Journal, Wiley Blackwell, vol. 38(7), pages 1416-1434, July.
    3. T. K. Das & Bing-Sheng Teng, 1998. "Time and Entrepreneurial Risk Behavior," Entrepreneurship Theory and Practice, , vol. 22(2), pages 69-88, January.
    4. Philip Bromiley, 2009. "A Prospect Theory Model of Resource Allocation," Decision Analysis, INFORMS, vol. 6(3), pages 124-138, September.
    5. Müllner, Jakob, 2016. "From uncertainty to risk—A risk management framework for market entry," Journal of World Business, Elsevier, vol. 51(5), pages 800-814.
    6. Johannes G. Jaspersen & Marc A. Ragin & Justin R. Sydnor, 2020. "Linking subjective and incentivized risk attitudes: The importance of losses," Journal of Risk and Uncertainty, Springer, vol. 60(2), pages 187-206, April.
    7. Zhang, Tingting (Grace) & You, Yu, 2021. "Scale or efficiency? Performance shortfall and engagement in production activities of foreign subsidiaries in China," Journal of International Management, Elsevier, vol. 27(1).
    8. Nizkorodov, Evgenia, 2021. "Evaluating risk allocation and project impacts of sustainability-oriented water public–private partnerships in Southern California: A comparative case analysis," World Development, Elsevier, vol. 140(C).
    9. Manel Baucells & Cristina Rata, 2006. "A Survey Study of Factors Influencing Risk-Taking Behavior in Real-World Decisions Under Uncertainty," Decision Analysis, INFORMS, vol. 3(3), pages 163-176, September.
    10. Richard J. Arend, 2020. "Strategic decision-making under ambiguity: a new problem space and a proposed optimization approach," Business Research, Springer;German Academic Association for Business Research, vol. 13(3), pages 1231-1251, November.
    11. Kuhberger, Anton, 1998. "The Influence of Framing on Risky Decisions: A Meta-analysis," Organizational Behavior and Human Decision Processes, Elsevier, vol. 75(1), pages 23-55, July.
    12. Christian Binz & Noosha Bronte Razavian & Michael Kiparsky, 2018. "Of Dreamliners and Drinking Water: Developing Risk Regulation and a Safety Culture for Direct Potable Reuse," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 32(2), pages 511-525, January.
    13. Joshua Steinfeld & Ron Carlee & Kouliga Koala, 2020. "DBFOM Contracting and Public Stewardship in the Norfolk-Portsmouth Elizabeth River Tunnels Public-Private Partnership," Public Organization Review, Springer, vol. 20(1), pages 37-62, March.
    14. Maria Claudia Angel Ferrero & Véronique Bessière, 2016. "From Lab to Venture: Cognitive Factors Influencing Researchers' Decision to Start a Venture," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 24(02), pages 101-131, June.
    15. Connor, Robert A., 1996. "More than risk reduction: The investment appeal of insurance," Journal of Economic Psychology, Elsevier, vol. 17(1), pages 39-54, February.
    16. Raimond Mauer & Steffen P. Sebastian, 2002. "Inflation Risk Analysis of European Real Estate Securities," Journal of Real Estate Research, American Real Estate Society, vol. 24(1), pages 47-78.
    17. Stefan Grimm & Martin G. Kocher & Michal Krawczyk & Fabrice Lec, 2021. "Sharing or gambling? On risk attitudes in social contexts," Experimental Economics, Springer;Economic Science Association, vol. 24(4), pages 1075-1104, December.
    18. Malcolm Baker & Richard S. Ruback & Jeffrey Wurgler, 2004. "Behavioral Corporate Finance: A Survey," NBER Working Papers 10863, National Bureau of Economic Research, Inc.
    19. Daniel V. Holland & Dean A. Shepherd, 2013. "Deciding to Persist: Adversity, Values, and Entrepreneurs’ Decision Policies," Entrepreneurship Theory and Practice, , vol. 37(2), pages 331-358, March.
    20. Enrico G. De Giorgi & David B. Brown & Melvyn Sim, 2010. "Dual representation of choice and aspirational preferences," University of St. Gallen Department of Economics working paper series 2010 2010-07, Department of Economics, University of St. Gallen.

    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:transa:v:118:y:2018:i:c:p:341-359. 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/547/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.