Effect Of Promotion Pressure And Financial Burden On Investment In Public–private Partnership Infrastructure Projects

Infrastructure has long been regarded as a leading industry in a country.It plays an important role in promoting employment,improving people’s livelihood and stimulating regional economic growth.Therefore,the construction of infrastructure is related to the development of the entire national economy and people’s livelihood.These industries have long been regarded as typical public undertakings and should be monopolized by state-owned enterprises.In recent years,with the continuous advancement of China’s urbanization process,the problem of the supply of state-owned enterprises in the infrastructure sector is difficult to meet the demand,and most of the infrastructure construction needs huge funds as support,and the local government debt is unsustainable.In this context,the Public-Private Partnership model(PPP),which introduces social capital to jointly build infrastructure,has ushered in development opportunities.However,in the process of implementing the PPP model in China,the "PPP overheating" problem appears,problems such as excessive PPP investment and pseudo PPP projects appear frequently have seriously hindered the smooth promotion of PPP mode in China..Through field investigation,we find that the "PPP assessment index" of the lower government and the local financial burden are the important push of the local accelerating investment infrastructure PPP project.According to this analysis,this paper,based on the combination of theory and empirical analysis,combined with the background of China’s political system,discusses the mechanism of the role of promotion pressure and financial burden on the investment of local government infrastructure PPP projects,which will provide theoretical and practical value for the smooth operation of PPP projects.Specifically,the research contents and viewpoints are divided into the following aspects:First,based on the characteristics of the infrastructure industry and the applicability analysis of the PPP model,this paper further elaborates the characterization of the PPP model in the infrastructure field.This paper analyzes the applicability of the PPP model in the infrastructure sector in combination with industry monopoly,quasi-public goods and externalities.In addition,this paper uses the PPP database of the Ministry of Finance to organize nearly 7986 infrastructure PPP projects,and finds that since 2013,China’s infrastructure PPP projects have been experiencing explosive growth,and there are obvious regional and industry distribution characteristics.Second,by constructing a mathematical model,this paper theoretically analyzes the impact mechanism of promotion pressure and financial burden on infrastructure PPP project investment.Firstly,this paper uses incentive theory to construct an economic model for analysis,and discusses the investment preference behavior of local governments under the dual promotion mode of political promotion and fiscal decentralization.It is found that local governments prefer political public goods such as investment infrastructure under political incentives.Secondly,combined with the investment preference of local government under political incentives,this paper constructs a three-party game model including government departments,production departments and PPP investment departments,theoretically analyzes the impact mechanism of promotion pressure and financial burden on infrastructure PPP project investment,it is found that the greater the pressure of promotion and the heavier the financial burden,the greater the investment in infrastructure PPP projects.Third,based on the PPP project library of the Ministry of Finance,this paper empirically tests the mechanism of promotion pressure and financial burden on infrastructure PPP project investment.This paper will use the 2013-2017 city-level panel data to empirically test the impact of promotion pressure and financial burden on infrastructure PPP projects.It is found that the personal promotion pressure of the officials and the financial burden of the local government have positively promoted the investment in infrastructure PPP projects.In addition,for the central region,officials are more motivated to promote,and their promotion pressure has a significant positive effect on infrastructure PPP project investment.For the eastern and western regions,the investment growth of infrastructure PPP projects is more due to the pressure of local government financial burden.At the same time,financial burden has significantly affected the investment in PPP projects in various infrastructure industries,and the pressure of official promotion has only significantly contributed to the investment in transportation,water and sewage disposal PPP infrastructure projects.Among them,promotion pressure and financial burden have the strongest effect on transportation PPP infrastructure project investment.In addition,this study further analyzed the heterogeneity effect of promotion pressure and financial burden on PPP infrastructure project types.The results showed that local governments are more inclined to promote investment in new PPP projects than in existing PPP projects.Fourth,this paper explores the innovative path of regulating the investment operation of PPP projects,and provides reasonable and effective policy recommendations for the smooth implementation of PPP mode in the infrastructure field.Based on the theoretical and empirical research on the impact of promotion pressure and financial burden on infrastructure PPP project investment,under the premise of fully considering the national conditions of China,this article tries to provide policy suggestions for the smooth operation of the infrastructure PPP project from the aspects of standardizing the investment behavior of the officials,bringing PPP performance into the official assessment index,preventing the risk of local debt caused by PPP overinvestment,selecting the scale of the PPP project reasonably and avoiding the excessive or inadequate of the PPP investment.So as to provide decision-making reference for relevant departments to formulate relevant policies.This article may be innovative in the following aspects:(1)This article explains the characteristic fact that local government accelerates the investment of infrastructure PPP projects from the level of Chinese political system,Exploring the deep-seated reasons for China’s "PPP overheating".(2)This paper constructs a three party game model which includes government departments,production departments and PPP investment departments,and discusses the mechanism of the role of political promotion and financial burden on infrastructure PPP project investment.(3)This paper empirically tests the impact mechanism of promotion pressure and financial burden on infrastructure PPP investment.This paper will use the city panel data to analyze the driving factors of infrastructure PPP investment on the basis of taking full account of the industry heterogeneity and regional heterogeneity.(4)This article proposes a system innovation path aiming at the smooth operation of infrastructure PPP projects.This paper puts forward the policy suggestions of standardizing the operation of the PPP items of the infrastructure of the local government from the aspects of standardizing the behavior of the local government officials,establishing the risk assessment and prevention mechanism of the local government debt,and forming the infrastructure construction planning and investment scale plan matching the local economic development.In order to provide useful reference for PPP model in the field of infrastructure research and practice.