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Public-private partnerships and investments in innovation: the influence of the contractual arrangement

Author

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  • Athena Roumboutsos

    (Department of Shipping, Trade and Transport - University of the Aegean)

  • Stéphane Saussier

    (IAE Paris - Sorbonne Business School)

Abstract

Public-private partnership (PPP) policy strategies emphasize the ability of PPPs to foster innovation. Evidence reported in literature supports less the inherent quality of PPPs for innovation and more the importance of contributing factors. The contractual agreement is the setting of these factors. In this context, an analytical model based on behavioural economics is presented, with boundary conditions reflecting various contractual configurations. The analysis indicates why, from a purely economic point of view, the private party in a PPP arrangement has an incentive to invest in low risk incremental innovations, which impact on, and positively effect, cost savings during construction and operation. It is also identified that further innovations are hampered by the ability to produce verifiable improvements correlated to performance. Findings contribute to the subject of public procurement for innovation in PPPs and support public authorities regarding the rationale, potential and necessary framework conditions for the use of public procurement as an innovation policy tool.
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Suggested Citation

  • Athena Roumboutsos & Stéphane Saussier, 2014. "Public-private partnerships and investments in innovation: the influence of the contractual arrangement," Post-Print hal-02500441, HAL.
    • Handle: RePEc:hal:journl:hal-02500441
    DOI: 10.1080/01446193.2014.895849
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    Cited by:

    1. Lena Brogaard, 2021. "Innovative outcomes in public-private innovation partnerships: a systematic review of empirical evidence and current challenges," Public Management Review, Taylor & Francis Journals, vol. 23(1), pages 135-157, January.
    2. Mahavadi Dhanshyam & Samir K. Srivastava, 2021. "Governance structures for public infrastructure projects: Public–private management regimes, contractual forms and innovation," Construction Management and Economics, Taylor & Francis Journals, vol. 39(8), pages 652-668, August.
    3. Nunzia Carbonara & Roberta Pellegrino, 2020. "The role of public private partnerships in fostering innovation," Construction Management and Economics, Taylor & Francis Journals, vol. 38(2), pages 140-156, February.
    4. Eva I. Hoppe & Patrick W. Schmitz, 2021. "How (Not) to Foster Innovations in Public Infrastructure Projects," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(1), pages 238-266, January.
    5. Athena Roumboutsos & Aristeidis Pantelias, 2015. "Allocating Revenue Risk in Transport Infrastructure Public Private Partnership Projects: How it Matters," Transport Reviews, Taylor & Francis Journals, vol. 35(2), pages 183-203, March.
    6. Chen, Xiaoyan & Locatelli, Giorgio & Zhang, Xinyue & Gong, Yunhao & He, Qinghua, 2022. "Firm and project innovation outcome measures in infrastructure megaprojects: An interpretive structural modelling approach," Technovation, Elsevier, vol. 109(C).
    7. Song, Yang & Zhang, Zhiyuan & Sahut, Jean-Michel & Rubin, Ofir, 2023. "Incentivizing green technology innovation to confront sustainable development," Technovation, Elsevier, vol. 126(C).
    8. Savunen, Tapio & Hämmäinen, Heikki & Kilkki, Kalevi & Kekolahti, Pekka, 2023. "The role of mobile network operators in next-generation public safety services," Telecommunications Policy, Elsevier, vol. 47(3).
    9. Anthony E. Boardman & Matti Siemiatycki & Aidan R. Vining, 2016. "The Theory and Evidence Concerning Public-Private Partnerships in Canada and Elsewhere," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 9(12), March.
    10. Jonathan Labbe, 2021. "Study of The Relationship Between Public and Private Venture Capitalists in France: A Qualitative Approach," Post-Print hal-03381477, HAL.
    11. Carlos Contreras & Julio Angulo, 2022. "Innovation and Tariff-adjustment Options in Public-private Partnerships," Hacienda Pública Española / Review of Public Economics, IEF, vol. 243(4), pages 51-81, December.
    12. Hanna Kociemska & Boguslaw Poltorak, 2021. "The Influence of Social Impact Bonds on Public–Private Partnership Success: The Case of Higher Education," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 423-438.
    13. Jonathan Labbe, 2021. "Study of The Relationship Between Public and Private Venture Capitalists in France: A Qualitative Approach," Papers 2110.09098, arXiv.org.
    14. Jonathan Labbé, 2020. "Study of the relations between public and private capital-investors in France: a qualitative approach [Étude des relations entre capital-investisseurs publics et privés en France : une approche qua," Post-Print hal-03000096, HAL.
    15. Annalisa Caloffi & Stephen Pryke & Silvia R Sedita & Matti Siemiatycki, 2017. "Public–private partnerships and beyond: Potential for innovation and sustainable development," Environment and Planning C, , vol. 35(5), pages 739-745, August.
    16. Yujia He & Lei Shi & Zhongfu Li, 2021. "The combined effect of marginal social and private benefit on the socially optimal equity structure of PPP projects," Construction Management and Economics, Taylor & Francis Journals, vol. 39(10), pages 807-823, October.
    17. Michael Himmel & Matti Siemiatycki, 2017. "Infrastructure public–private partnerships as drivers of innovation? Lessons from Ontario, Canada," Environment and Planning C, , vol. 35(5), pages 746-764, August.

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