Research on the participation path of private enterprises in PPP projects

2.3.1 Interview design and implementation

Semi-structured interview is applied, and the interview outline (Table 2) is set in three parts. The first part is informative section, which is mainly used for collecting interviewees’ information so as to have a primary understanding of interviewees’ personal professional background and previous experience; The second is objective section, which attempts to get a preliminary understanding of the current situation of private enterprises’ participation in PPP projects, their participation motives, and main factors that affect the transformation of their willingness into actual participation behavior from objectively existing phenomena; The third is subjective section, which aims to flexibly adjust the interview outline in accordance with the subjective expressions of the interviewees, and conduct in-depth exchanges with the interviewees on the objective current situation in order to dig more content.

The interviews were conducted in the form of a combination of personal in-depth interviews and group interviews, which applied face-to-face exchange with each interview lasting 1 to 2 hours. At first, a personal in-depth interview was conducted with each interviewee to know their attitude and personal opinion on private enterprises’ participation in PPP projects as deep as possible; then 5 group interviews were set according to projects for free discussion with a host leading the members to follow the interview outline. During the interview, the author of this paper kept records, adjusted questions according to the expressions of the interviewees, and put forward further questions for the new questions mentioned in the interviews, so as to dig deep of the content. After the interviews, the author would check the interview records with each interviewee to ensure the validity and effectiveness of the interviews. Besides, the author would make the second-round interview with some of the interviewees on some questions or data through online forms such as WeChat or phone call after the face-to-face interviews. The records of the second-round interviews and materials and data donated by some interviewees have also been included in this study.

After the interviews, the members in the same project group with the authororganized all the interview materials into document format as a final interview record of nearly 130 thousand words. This original data was further processed and encoded through the software of NVivo12.

(1) Level-1 codes

The original data was used as the encoding material, which would be further conceptualized and categorized through encoding word for word and sentence for sentence. For example, interviewee a08 said “The bidding documents clearly stated that the bidding company must have BOT or TOT experience, so the winning company must have the experience before.” Through the conceptualization process, the concept of “previous experience” was got and the category of “enterprise’s competence” was got as well, so that the level-1 encoding completed. Finally, 33 level-1 codes were concluded and formed the level-1 code system in this paper. See to Table 3 (only 2 original sentences and some original concepts and categories are explained because of the limited length).

(2) Level-2 codes

Level-2 code is a new system that is formed through the categorization of relations, including cause-effect, context, inclusion and so on, among different categories based on open coding [16]. As shown in Table 5, numerous interviewees believed that the social value would be realized on a certain degree through improving the reputation of the corporate or the entrepreneur, which was therefore added to level-2 code “realization of social value”. 13 level-2 codes were concluded in the similar way.

(3) Level-3 codes

A systematic analysis was carried out for all the conceptualizations shown in the interview materials of the PPP projects with private participation to abstract and condense into a highly generalized “coral categories”. Therefore 4 level-3 codes were extracted from 13 level-2 codes, which are: participation motives, perception, participation behavior gains, and continuous participation willingness.

The initial participation motives for private enterprises’ participation in PPP projects include participation atmosphere of the enterprise, developing demand of the enterprise, realization of social value, and industries suitable for private participation. Participation atmosphere of the enterprise refers to the favorable impression for the PPP project generated through initial preference public opinion, suggestions from experts and scholars, and reference to domestic and foreign successful experience. For example, the frequently released documents of national ministries and commissions that strongly support the development of private enterprises and their participation in PPP projects; experts and scholars universally believe that the participation of private enterprises is more conducive to the sustainable development of the PPP model. Developing demand of the enterprise refers to the demand of the private enterprises for better development in multiple aspects such as making profits. The interview materials showed that most private enterprises, like other social capital, would give more consideration to the future profitability of the project when participating in a PPP project. Some enterprises would choose PPP projects because they need more projects to expand their development; some would pay attention to the project because of their curiosity for PPP model; some other would consider more on the relationship with the local government when they participate in PPP project in a new administrative district and lower their profit-making expectation at the same time, just like interviewee a04 said his company chose low return rate in order to expand the local market since that’s the first project of his company in the new city. Social value includes enterprise reputation and entrepreneur reputation. Although the profit of PPP projects is relatively low, it often influences infrastructure and people’s daily life. Therefore, the successful participation in PPP projects has certain public goods attribute which can improve social value of the enterprise, as well as the enterprise reputation.

3.1.2 Perception

Perception can be divided into perception of the enterprise’s attitude, participation environment perception, and perception of the enterprise’s competence. Perception of the enterprise’s attitude refers to the subjective attitude of the private enterprise towards participation in PPP projects under various influencing factors. Facing specific project, the enterprise would make subjective judgment on the project risk. The so-called “two reports and one plan” (i.e. Project implementation plan, value-for-money evaluation report and financial affordability demonstration report) is the preliminary assessment of the project risk, for project benefit and risk are important factors to decide the attitude of the enterprise. The participation situation of other enterprises may also influence the subjective attitude of the enterprise. According to the interview records, the author divides the influence of participation situation of other enterprises into three categories: the first is fair competitive attitude. Private enterprises, together with other social capitals, bid normally and are selected fairly by the project bidder. This situation currently accounts for the majority. From the results of interviews with most governmental representatives, the government generally believes that there is no discrimination against the entry of private enterprises; the second is negative attitude. When bidding with state-owned enterprises, some private enterprises are affected by the old ideas of “privileged state-owned enterprise and underprivileged private companies” or “the government favored state-owned enterprises”, and with some natural advantages of state-owned enterprises in some aspects including financing, these private enterprises may hold a negative attitude; and the last is active attitude.Some private enterprises would follow others in the same industry as taking the business development of the competitive private enterprises into consideration as their own. The personal attitude of the entrepreneur is also non-neglectable both in participation willingness and participation attitude of the private enterprise. As the decision-maker, the entrepreneur often controls the developing direction of the company. Therefore, if the entrepreneur personally holds an active attitude towards and is willing to participate in PPP project, then the enterprise would take the same attitude.

Participation environment perception refers to the comprehensive judgment of the private enterprises on whether they currently have a suitable external environment for participation in PPP projects, including local economic developing potential, influence of the 3rd party, financing environment, laws, regulations and policies, local government and developing prospect of the industry. The local economic developing potential is composed of current economic development and future economic developing potential. In the interview, we learned that the local current economic development has small influence on private participation, while whether it is suitable to participate and future developing potential have stronger influence on the perception of participation environment. Let’s take the situation in West China as an example: the economic retarded “eat meal” financial areas generally consider to achieve the purpose of infrastructure construction through investment promotion. Smaller competition pressure with large-scaled state-owned enterprises and lower requirements on capital investment’s scale and amount make these areas much easier for private enterprises to invest; Furthermore, there are also some large private enterprises focusing on the future developing potential in the local area innovatively propose a developing PPP model which uses the new industry city model to realize revenue through future development and value-adding. The influence of the 3^rd party comes from the 3^rd party organizations and platforms that participate in PPP projects, such as consultant companies and data-analysis organizations in PPP industry. The 3^rd party is needed for project bidding, tendering, and formulation of cooperation agreement. The vigorous development of the 3^rd party will help to construct a good environment for private enterprises’ participation. Because of relatively poor financial power, private enterprises are often faced with difficult and costly financing. We found in the interview that some financial organizations required a company with “Zhong” prefix to guarantee the financing, which made it harder for private enterprises to participate in PPP projects. Laws, regulations and policies include the relevant laws and regulations suitable for the participation of private enterprises in PPP projects, for example, although the multiple policies issued by national ministries and commissions that have ensured the private enterprises’ participation in PPP projects, there is no applicable laws and regulations to regulate the behaviors of interest-related parties. Local government involves its attitude towards private enterprises’ participation in PPP project and its execution ability. PPP projects need governmental coordination on a larger sphere because of its complex connection with multiple units and complicated approval process. Developing prospect of the industry means the future development of the industry to which the project is belonged.

Perception of the enterprise’s competence refers to the enterprise’s prejudgment for its risk-control ability in the project and the self-evaluation of its strength when facing with the project. Control ability of the project is the prejudgment for future possible risk-control ability and the prejudgment for its own investment and operation abilities when the enterprise wins the project. For instance, interviewee a06 stated that since his company has its own construction team so that it can control the risks in construction period, construction quality and cost, and the company cared little about the profit and loss of the project because it can make up for the loss from other industries.

3.1.3 Participation behavior gains

Participation behavior gains refer to the visible and invisible profit or loss after the enterprise carried out participation behavior in PPP project, including economic benefits, social benefits, invisible strength and experience feeling. The completion of a project will display the profit and loss on economic benefits. A successful project must have good profitability and a part of invisible benefits coming from the improvement of the brand value. Because of the public goods attribute of the PPP project, the implementation of the project always brings about some social benefits, which would influence the promotion of local economic development, optimization of ecological environment, and convenience in residents’ life. Invisible strength refers to the accumulation of successful or failing experience in project operations obtained through participation in the project and the rise or decline in industry status that may accompany. For instance, a successful implementation of wastewater treatment project would bring objective economic profit. With the advancing wastewater treatment ability in the city, the enterprise would make great contribution to the local water ecology; with the accumulation of participation experience in PPP projects, this private enterprise would take this as a footstone to open markets in other places and also become a model with certain influence in the industry. Experience feeling is the subjective experience during the participation process, including whether the participation process is complicated and whether the exit mechanism is sound. For private enterprises, a simple participation process without possible follow-up worries would be a reflection of a good experience.

3.1.4 Continuous participation willingness

Continuous participation willingness includes two aspects of acquisition cognition and cognition for developing environment. Acquisition cognition is the private enterprise’s cognition of participation behavior after the actual participation in the project. In the interview, we learned that some private enterprises have taken part in PPP projects for many times and they generally have good acquisition cognitions which are mostly positive.

Cognition for developing environment is the private enterprise’s cognition towards the present developing environment. Similar to the perceptions mentioned in (2), it is a process of reperceiving new project. Although private enterprise often considers to take part in new PPP project based on its previous participation experience, however, it still needs to remeasure through perception to decide whether to take the participation behavior. One person in charge of an enterprise who had participated in many PPP projects said in the interview: “We did good in last project, so we are very interested in this similar project. Because we have experience, however, we still need to carry out ‘two reports and one plan’ and decide whether to take part in the bidding according to our competence”.

3.2.1 Analysis on participation path of private enterprises

Through the analysis on interview materials of different participation parties and interviewees, it’s natural to conclude in the view of private enterprises that their participation in PPP projects is fundamentally the generation of participation behavior. When a private enterprise obtains information on the development of the PPP industry or related project information in some way, the decision-makers or the decision-making departments of the enterprise will be attracted just like by other ordinary projects.Private enterprise that has never participated in a PPP project will form initial participation motives based on the curiosity of strange things, the strategic needs of different development stages of the enterprise, the realization of the corporate’s social values, and the maturity of the industry. After the generation of initial participation motives, the participation willingness of the private enterprise will change through perception and transform into actual participation behavior based on the comprehensive consideration of the internal and external conditions of the private enterprise at the critical point. The generation of participation behavior means that the private enterprise has completed one participation. Participation behavior will lead to acquisition cognition. After private enterprise’ participation behavior, there are three kinds of situations: the first is the establishment of cooperation relationship between the private enterprise and the government and the successful completion of the project; the second is the establishment of cooperation relationship between the private enterprise and the government, but failed in the project; the last is the private enterprise and the government do not form cooperative relationship. Three different situations will lead to different acquisition cognition, and further influence the generation of continuous participation willingness.

3.2.2 Generation of participation behavior through the influence of perception on participation willingness

Perception is the key to the process of private enterprise’s participation in the PPP project. After the generation of participation motives and before the establishment of cooperation relationship with the government, the private enterprise would always have a “doubtful” attitude towards taking the actual participation behavior and stay in a “doubtful” state. At this moment, the private enterprise always considers whether all the internal and external factors can satisfy the conditions of generating the participation behavior, which is the perception mentioned above. The private enterprise should firstly determine whether it has a positive attitude towards its participation in the PPP project, and then need to evaluate both the enterprise itself and the external environment at the same time. If the private enterprise has enough competence to participate in the project, its participation willingness will change all the time until the willingness transforms into participation behavior at the critical point when the private enterprise perceives favorable external environmental conditions such as the macro policies that strongly support the development of private enterprises, easier financing from financial institutions, strong execution of the local government, and no threshold for private enterprises to participate in PPP projects.

3.2.3 Continuous participation willingness’ influence on the generation of a second participation

After the first participation, the private enterprise with participation experience will form the participation behavior gains. If the gains are positive, the private enterprise can acquire good social benefits, economic benefits, increase of invisible strength and good experience feeling after the first participation in the PPP project. This kind of positive participation behavior gains would stimulate the generation of continuous participation willingness of the private enterprise through a good acquisition cognition and a good developing environment. Continuous participation willingness is influenced by initial participation motives at the same time, and functions together with it in the process of perception. The perception of the enterprise’s attitude, participation environment, and the enterprise’s competence equip the private enterprise with stronger risk-control ability and more powerful competence of its own brought by a more active participation attitude, better participation environment and richer participation experience, so as to stimulate the reoccurrence of the participation behavior to complete the second participation.

3.2.4 Explanation of participation behavior of private enterprises from the perspective of planned behavior theory

During the analysis of private enterprises’ participation in PPP projects, the author found out that the features and principles in the participation of private enterprises in PPP projects are consistent with the relevant content of planned behavior theory. Planned behavior theory is an important theory proposed by Ajzen[17] used to explain and predict the individual behaviors, and is widely applied in various fields such as Management and Psychology. The main points of planned behavior theory are: (1) Individual behavior is affected by individual willingness [18–22]; (2) Behavioral attitudes, subjective norms, and intuitive behavioral controls determine individual behavioral willingness [23]. Corresponding to the study of private enterprises’ participation behavior, the generation of private enterprises’ participation behavior is also influenced by the enterprises’ participation willingness. The perception of the enterprise’s attitude, participation environment, and the enterprise’s competence in the perception process seem to be explained by behavioral attitudes, subjective norms, and intuitive behavioral controls, respectively. The perception process influences the participation behavior by affecting the participation willingness, which is in accordance with the ideas of planned behavior theory [24].