Interorganizational Sponsor Networks in Road and Social Infrastructure PPP Equity Markets

Abstract

Although researchers have studied public-private partnership (PPP) development processes for several decades, the extant literature provides little evidence of how special purpose vehicles (SPVs) are formed and how PPP sponsors (the leaders of SPVs) interact across series of multiple PPP projects. Building on concepts related to interorganizational projects, social network analysis (SNA), and self-organizing networks, this study examines the nature of relationships between PPP sponsors at the moment of creating SPVs in the road and social infrastructure PPPs across six European countries (i.e., Germany, Spain, France, the Netherlands, Italy, the United Kingdom) from 1995 to 2019. Data were obtained from two different proprietary databases and several publicly available sources. Results suggest that, despite the unique features of each jurisdiction, the studied PPP sectors exhibit self-organizing patterns in which sponsors establish relationships in ways that are neither completely regular nor fully random. The analysis reveals that sponsor networks exhibit an important presence of prominent, well-connected (i.e., high degree centrality) firms with capabilities to influence (i.e., high eigenvector centrality) or facilitate (i.e., high betweenness centrality) tie formation processes. Conclusions indicate that sponsors tend to form tightly knit collaboration groups at the moment of creating SPVs; however, they are also open to connect with competitors and unknown partners through intermediaries. Overall, this study contributes to a deepened understanding of SPV formation processes, provides a real-world longitudinal comparison of sponsors’ networks in multiple PPP jurisdictions and sectors, and offers a novel conceptualization of PPP networks as self-organizing structures. In general, the lessons from this investigation are helpful for policymakers to design better tendering processes and for PPP investors to gain strategic insights into markets in which they are (or want to be) involved.