There has been a huge shift in infrastructure development since the introduction of public-private partnership. However, one of the government's challenges continues to be the absence of private sector engagement in such an arrangement. Therefore, the purpose of this study is to explore non-financial factors that influence investors' decisions to fund PPP projects. This study specifically aims to present a conceptual examination of how private sector investment decisions in PPP in Indonesia are influenced by trust in government and its components, including government service quality, government transparency, and similarity of values. The findings show that trust in government and its attributes play important roles in PPP investment decision. Overall, the findings highlight the significance of non-financial variables in attracting the private sector to participate in government programs, including PPP.
Akhtar, F., & Das, N. (2019). Predictors of investment intention in Indian stock markets: Extending the theory of planned behaviour. International Journal of Bank Marketing, 37(1), 97–119. https://doi.org/10.1108/IJBM-08-2017-0167.
Albalate, D., Bel, G., & Geddes, R. R. (2013). Recovery Risk and Labor Costs in Public-Private Partnerships: Contractual Choice in the US Water Industry. Local Government Studies, 39(3), 332–351. https://doi.org/10.1080/03003930.2013.778831.
Albalate, D., Bel, G., & Geddes, R. R. (2020). Do Public-Private-Partnership-Enabling Laws Increase Private Investment in Transportation Infrastructure? The Journal of Law and Economics, 63(1), 43–70. https://doi.org/10.1086/706247.
Albu, O. B., & Flyverbom, M. (2019). Organizational Transparency: Conceptualizations, Conditions, and Consequences. Business and Society, 58(2), 268–297. https://doi.org/10.1177/0007650316659851.
Andaleeb, S. S., Saleh, M. A., & Ali, M. Y. (2022). The moderating role of cultural similarity in developing commitment in the industrial importer-supplier relationship. Journal of Business and Industrial Marketing, 37(3), 657–672. https://doi.org/10.1108/JBIM-07-2020-0309.
Bastida Albaladejo, F. J. (2019). Transparency and government trust. Public Sector Economics, 43(1), 15–19. https://doi.org/10.3326/PSE.43.1.3
Bayly, B. L., & Bumpus, M. F. (2020). Patterns and implications of values similarity, accuracy, and relationship closeness between emerging adults and mothers. Journal of Moral Education, 49(4), 496–511. https://doi.org/10.1080/03057240.2019.1669545.
Beshi, T. D., & Kaur, R. (2020). Public Trust in Local Government: Explaining the Role of Good Governance Practices. Public Organization Review, 20(2), 337–350. https://doi.org/10.1007/s11115-019-00444-6.
Carnis, L., & Yuliawati, E. (2013). Nusantara: Between sky and earth could the PPP be the solution for Indonesian airport infrastructures?. Case Studies on Transport Policy, 1(1-2), 18-26.
Chan, A. P. C., & Oppong, G. D. (2017). Managing the expectations of external stakeholders in construction projects. Engineering, Construction and Architectural Management, 24(5), 736–756. https://doi.org/10.1108/ECAM-07-2016-0159.
Clark, S. S., Seager, T. P., & Chester, M. V. (2018). A capabilities approach to the prioritization of critical infrastructure. Environment Systems and Decisions, 38(3), 339–352. https://doi.org/10.1007/s10669-018-9691-8.
Cruz, N. F. da, & Marques, R. C. (2012). Delivering Local Infrastructure through PPPs: Evidence from the School Sector. Journal of Construction Engineering and Management, 138(12), 1433–1443. https://doi.org/10.1061/(asce)co.1943-7862.0000558.
Donaubauer, J., Meyer, B. E., & Nunnenkamp, P. (2016). A New Global Index of Infrastructure: Construction, Rankings and Applications. World Economy, 39(2), 236–259. https://doi.org/10.1111/twec.12290.
Engel, E., Fischer, R., & Galetovic, A. (2010). The economics of infrastructure finance: Public-Private Partnerships versus public provision. EIB Paper, 15(1), 40–59.
Fledderus, J. (2015). Building trust through public service co-production. International Journal of Public Sector Management, 28(7), 550–565. https://doi.org/10.1108/IJPSM-06-2015-0118.
Foscht, T., Lin, Y., & Eisingerich, A. B. (2018). Blinds up or down?: The influence of transparency, future orientation, and CSR on sustainable and responsible behavior. European Journal of Marketing, 52(3–4), 476–498. https://doi.org/10.1108/EJM-10-2016-0576.
Grimmelikhuijsen, S., Porumbescu, G., Hong, B., & Im, T. (2013). The Effect of Transparency on Trust in Government: A Cross-National Comparative Experiment. Public Administration Review, 73(4), 575–586. https://doi.org/10.1111/puar.12047
Grimsey, D., & Lewis, M. K. (2004). Public Private Partnerships: The Worldwide Revolution in Infrastructure Provision and Project Finance (1st ed.). Edward Elgar Publishing Ltd.
Habibov, N., Cheung, A., & Auchynnikava, A. (2017). Does social trust increase willingness to pay taxes to improve public healthcare? Cross-sectional cross-country instrumental variable analysis. Social Science and Medicine, 189, 25–34.
https://doi.org/10.1016/j.socscimed.2017.07.023.
Harris, M., & Raviv, A. (2010). The Society for Financial Studies Control of Corporate Decisions?: Shareholders vs . Management. The Review of Financial Studies, 23(11), 4115–4147.
In, S. Y., Casemiro, L. A. S., & Kim, J. (2017). A decision framework for successful private participation in the airport sector. Journal of Air Transport Management, 62, 217–225. https://doi.org/10.1016/j.jairtraman.2017.05.001.
Ismail, S., Musawa, M. S., & Ahmad, H. (2019). Transparency of public private partnership (PPP): the extent of mandatory information disclosure. Built Environment Project and Asset Management, 9(5), 655–668. https://doi.org/10.1108/BEPAM-01-2018-0020.
Jianqing, J. (2016). The Role of Financial Institutions in Economic Development. Central Banking. https://doi.org/10.1007/978-1-4615-4040-3_13.
Ke, Y., Wang, S., Chan, A. P., & Lam, P. T. (2010). Preferred risk allocation in China’s public–private partnership (PPP) projects. International Journal of Project Management, 28(5), 482-492.
Kim, S., & Baniamin, H. M. (2021). Understanding the Dynamics of Institutional Trust in Indonesia, Malaysia, and Thailand. International Journal of Public Administration, 00(00), 1–11. https://doi.org/10.1080/01900692.2021.1948566.
Kim, S., Lee, J., & Lee, J. (2018). Citizen participation and public trust in local government: The Republic of Korea case. OECD Journal on Budgeting, 18(2), 73–92. https://doi.org/10.1787/budget-18-5j8fz1kqp8d8.
Kociemska, H. (2020). Public- Private Partnership: Reconciling Mainstream and Islamic Finance in sub-Saharan Africa. Emerging Markets Finance and Trade, 56(12), 2891–2907. https://doi.org/10.1080/1540496X.2019.1695594.
Lind, E. A. (2018). Transparency, trust and public value. In J. Wanna & S. Vincent (Eds.), Opening Government (pp. 87–105). ANU Press.
https://www.jstor.org/stable/j.ctv1rmjnq.12.
Liu, J., Lei, X., Zhou, Y., & Zeng, J. (2022). Analyzing Factors Influencing Government Control Rights in PPP Projects from the Perspective of Investors. Discrete Dynamics in Nature and Society, 2022, 1–9. https://doi.org/10.1155/2022/9394382.
Liu, T., & Wilkinson, S. (2011). Adopting innovative procurement techniques: Obstacles and drivers for adopting public private partnerships in New Zealand. Construction Innovation, 11(4), 452–469. https://doi.org/10.1108/14714171111175918.
Martin, L. L. (2016). Making sense of public-private partnerships (P3s). Journal of Public Procurement, 16(2), 191–207. https://doi.org/10.1108/jopp-16-02-2016-b002.
Martínez, P., & Rodríguez del Bosque, I. (2013). CSR and customer loyalty: The roles of trust, customer identification with the company and satisfaction. International Journal of Hospitality Management, 35, 89–99. https://doi.org/10.1016/J.IJHM.2013.05.009.
Mehrotra, S., Jonker, C. M., & Tielman, M. L. (2021). More Similar Values, More Trust? - The Effect of Value Similarity on Trust in Human-Agent Interaction. In AIES 2021 - Proceedings of the 2021 AAAI/ACM Conference on AI, Ethics, and Society (Vol. 1, Issue 1). Association for Computing Machinery.
Mohamad, R., Ismail, S., & Mohd Said, J. (2018). Performance objectives of public private partnership implementation in Malaysia: perception of key players. Journal of Asia Business Studies, 12(1), 17–30. https://doi.org/10.1108/JABS-09-2015-0167.
Nunkoo, R., Ribeiro, M. A., Sunnassee, V., & Gursoy, D. (2018). Public trust in mega event planning institutions: The role of knowledge, transparency and corruption. Tourism Management, 66, 155–166. https://doi.org/10.1016/j.tourman.2017.11.010.
Pfisterer, S. (2017). Public–Private Partnership for Development: Governance Promises and Tensions Stella. In The Emerald Handbook of Public–Private Partnerships in Developing and Emerging Economies (pp. 141–164). https://doi.org/https://doi.org/10.1108/978-1-78714-493-420171005.
Pinem, A. A., Immanuella, I. M., Hidayanto, A. N., Phusavat, K., & Meyliana. (2018). Trust and its impact towards continuance of use in government-to-business online service. Transforming Government: People, Process and Policy, 12(3–4), 265–285. https://doi.org/10.1108/TG-02-2018-0008.
Rim, H., & Dong, C. (2018). Trust and distrust in society and public perception of CSR: A cross-cultural study. Social Responsibility Journal, 14(1), 1–19. https://doi.org/10.1108/SRJ-01-2017-0016.
Sharma, C. (2012). Determinants of PPP in infrastructure in developing economies. Transforming government: people, process and policy.
Siegrist, M., Siegrist, M., Cvetkovich, G., & Roth, C. (2000). Salient Value Similarity , Social Trust , and Risk / Benefit Perception. Risk Analysis, 20(3), 353–362. https://doi.org/10.1111/0272-4332.203034.
Sultan, P., & Wong, H. Y. (2019). How service quality affects university brand performance, university brand image and behavioural intention: the mediating effects of satisfaction and trust and moderating roles of gender and study mode. Journal of Brand Management, 26(3), 332–347. https://doi.org/10.1057/s41262-018-0131-3.
Van Prooijen, A. M. (2019). Public trust in energy suppliers’ communicated motives for investing in wind power. Journal of Environmental Psychology, 61(January), 115–124. https://doi.org/10.1016/j.jenvp.2019.01.004.
Walter, I. (2016). Legal Structures and Frameworks. In The Infrastructure Finance Challenge (pp. 31–38). New York University.
https://doi.org/10.11647/obp.0106.04.
World Bank Group. (2014). The World Bank Group A to Z 2015. World Bank Publications.
Xu, X., Xie, Y., Xiong, F., & Li, Y. (2022). The Impact of COVID-19 on Investors’ Investment Intention of Sustainability-Related Investment: Evidence from China. Sustainability (Switzerland), 14(9). https://doi.org/10.3390/SU14095325.
Xu, Y., Chan, A. P. C., & Yeung, J. F. Y. (2010). Developing a Fuzzy Risk Allocation Model for PPP Projects in China. Journal of Construction Engineering and Management, 136(8), 894–903. https://doi.org/10.1061/(asce)co.1943-7862.0000189.
Zangoueinezhad, A., & Azar, A. (2014). How public-private partnership projects impact infrastructure industry for economic growth. International Journal of Social Economics, 41(10), 994–1010. https://doi.org/10.1108/IJSE-04-2013-0083.
Zhao, D., & Hu, W. (2017). Determinants of public trust in government: empirical evidence from urban China. International Review of Administrative Sciences, 83(2), 358–377. https://doi.org/10.1177/0020852315582136.
In-Text Citation: (Amin et al., 2022)
To Cite this Article: Amin, A., Ahmad, M. A. N., Sholihin, M., & Rahman, R. A. (2022). Trust in Government and Public-Private Partnership on Infrastructure Financing: Indonesian Experience. International Journal of Academic Research in Business and Social Sciences, 12(10), 677– 690.
Copyright: © 2022 The Author(s)
Published by Knowledge Words Publications (www.kwpublications.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
