TY - JOUR
T1 - Public–private partnerships and economic growth : a sectoral analysis from developing countries
AU - Mofokeng, Mapule
AU - Alhassan, Abdul Latif
AU - Zeka, Bomikazi
PY - 2024
Y1 - 2024
N2 - Governments, particularly in developing countries, are continuously faced with the challenge of expanding infrastructure to keep up with population growth and rapid urbanisation. This challenge arises from the fact that public resources are strained as governments face high budget deficits and rising debt-to-GDP ratios. At the same time, development institutions alone have not succeeded in narrowing this financing gap. The constraints placed on the budgetary requirements of governments have shifted attention to public and private partnerships in financing infrastructure projects, which are at the heart of service delivery in developing countries. Whilst the use of Public–Private Partnership (PPPs) is a growing trend in developing countries, there is limited empirical studies that have assessed the impact of PPP investments on economic growth. This article, therefore, extends the limitations in the literature by investigating the effect of PPP sectoral investments on economic growth among 35 developing countries from 1997 to 2018 within the neoclassical growth framework. Using the system GMM estimation technique, we find aggregate PPP investment and energy investment to positively contribute to economic growth, which highlights the multiplier effect of energy in stimulating economic growth in developing economies. The policy implications of the findings are discussed.
AB - Governments, particularly in developing countries, are continuously faced with the challenge of expanding infrastructure to keep up with population growth and rapid urbanisation. This challenge arises from the fact that public resources are strained as governments face high budget deficits and rising debt-to-GDP ratios. At the same time, development institutions alone have not succeeded in narrowing this financing gap. The constraints placed on the budgetary requirements of governments have shifted attention to public and private partnerships in financing infrastructure projects, which are at the heart of service delivery in developing countries. Whilst the use of Public–Private Partnership (PPPs) is a growing trend in developing countries, there is limited empirical studies that have assessed the impact of PPP investments on economic growth. This article, therefore, extends the limitations in the literature by investigating the effect of PPP sectoral investments on economic growth among 35 developing countries from 1997 to 2018 within the neoclassical growth framework. Using the system GMM estimation technique, we find aggregate PPP investment and energy investment to positively contribute to economic growth, which highlights the multiplier effect of energy in stimulating economic growth in developing economies. The policy implications of the findings are discussed.
KW - developing countries
KW - economic growth
KW - PPPs
UR - http://www.scopus.com/inward/record.url?scp=85160960693&partnerID=8YFLogxK
U2 - https://doi.org/10.1080/15623599.2023.2217374
DO - https://doi.org/10.1080/15623599.2023.2217374
M3 - Article
SN - 1562-3599
VL - 24
SP - 1029
EP - 1037
JO - International Journal of Construction Management
JF - International Journal of Construction Management
IS - 10
ER -