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In public–private partnership (PPP) projects, state-owned investors, with their administrative attributes, tend to be more concerned with their own face-saving (self-face) concerns, whereas private investors that partner with the government pay more attention to the government's face-saving (other-face) concerns than their own. The two kinds of face-saving concerns both aggravate escalation of commitment (EOC). Accordingly, a multigroup model based on questionnaire data was built to analyze the differences in face-saving concerns of the two types of investors and the cross-enterprise differences that influence investors' EOC. The main findings are as follows: state-owned investors prefer self-face concerns; the influence of face-saving concerns on investors' EOC does not differ across enterprises; and self-face concerns and other-face concerns each have significant influence on both kinds of investors' EOC, but the latter plays a larger role. The study enriches the understanding of EOC and emphasizes the advantages of private capital in reducing investors' behavioral risk. The findings are conducive to improving the mechanism and control of multistakeholder EOC in PPP projects. [ABSTRACT FROM AUTHOR]

In public-private partnership (PPP) projects, as the largest funds provider, financial institutions only supervise the cash flow in the project's implementation stage. Since financial institutions are not involved in the project's preliminary planning stage, they have inadequate risk management to projects, leading to adverse effects on the following project's implementation. This paper proposes that financial institutions intervene in PPP projects early, use their resources to make reasonable plans for the project, enhance the identification and control of project risks, and improve the project profitability and successful implementation possibility. Based on the transaction cost theory, this paper constructs the incentive mechanism and value-added Stackelberg game model of PPP projects under the scenario that financial institutions intervene early. Considering financial institutions intervene in PPP early, the government will reduce planning costs and private investors will save financing costs. The results show that financial institutions' early intervention in PPP projects can enhance the government's efforts, private investors' efforts, the government's incentive intensity, and also the project's value-added level. Compared with financial institutions that do not intervene in advance, the entire model can achieve Pareto improvement. This paper is conducive to expanding the application of transaction cost theory in PPP projects. In addition, it can also be conducive to improving the status quo that financial institutions cannot participate in PPP projects in the early stage and promoting the successful implementation of PPP projects. [ABSTRACT FROM AUTHOR]

The early termination of public–private partnerships (PPP) frequently occurs in large infrastructure projects. Studies have analyzed the issue of compensation arising from early termination; however, most have ignored optionality in managing the risks and uncertainties embedded in these settings. Using real option theory, this paper examines pricing mechanisms for early termination under two different scenarios, namely, those of excessively high or excessively low cash flows, wherein early termination of PPP projects occurs during the stage of the operation prior to the final stage of asset transfer. The results show that while the pricing of early termination is mainly determined by the actual cash flow profile, it is also related to the level of total investment and return on investment. The final value of compensation agreed upon is also dependent on the bargaining power of each party. These findings contribute new insights into the pricing mechanisms of early termination used by governments and private investors. The quantification and derivation of early termination prices up front serves as a valuable benchmark and a good starting point for both governments and investors during negotiations and addresses the issue of compensation for early termination in a fair and reasonable manner. [ABSTRACT FROM AUTHOR]