Are There Optimal Forms of Public-Private Partnerships?

Abstract

Many emerging economies have launched ambitious efforts to privatize state-owned enterprises (SOEs). However, not all privatization entails complete ownership and control transfer from public to private hands. In this study, we recognize different forms of public-private partnerships in investment projects in emerging economies. We conceptualize these organization forms as different ownership and control by SOEs and private entities. Integrating transaction cost economics (TCE), agency theory, and institution-based view; we propose that public-private partnership forms are interdependent with characteristics of private entities and institutional environments. We find that there are optimal forms of partnerships that benefit the performance of public-private investments.