How risk factors lead to the early termination of public–private partnership projects in China: a multi-case study based on social network analysis and interpretive-structure modeling

Purpose Early termination of public–private partnerships (PPPs) in China is caused by various risk factors, resulting in significant losses. This study aimed to clarify the key factors and identify the causal relationships among these factors. Design/methodology/approach Social network analysis (SNA) was used to analyze 37 risk factors that were summarized from 97 early terminated PPP cases and to identify the relationships among these key risk factors. Interpretive structural modeling (ISM) was conducted to explore the causal relationships. Data were collected from case documents, questionnaires and interviews. Findings A total of 17 key risk factors were identified and distributed in a hierarchical structure with six tiers. Among these key risk factors, the root causes affecting the early termination of PPP projects were government oversight in decision-making, local government transition, policy and law changes and force majeure. The direct cause was insufficient returns. Furthermore, local government and private sector defaults were essential mediating factors. Local government transition and the low willingness of the private sector were highlighted as potential key risks. Research limitations/implications The cases and experts were all from China, and outcomes in other countries or cultures may differ from those of this study. Therefore, further studies are required. Practical implications This research provides knowledge regarding the key risk factors leading to the early termination of PPP projects and guidance on avoiding these factors and blocking the factors' transmission in the project lifecycle. Originality/value This study contributes to the knowledge of risk management by emphasizing the importance of local government transition, the low willingness of the private sector and project cooperation and operation, whose significance is ignored in the existing literature. The proposed ISM clarifies the role of risk factors in causing early termination and explains their transmission patterns.