The impact of conflicts between government and private sector on the performance of PPP projects

Purpose A growing number of studies are focusing on effectively and comprehensively addressing conflicts in PPP projects. However, our understanding of how to govern the conflict between the government and private sector is still limited. The purpose of this research is to investigate the effects of conflict on the performance of PPP projects and to better manage conflicts. Design/methodology/approach This research constructs a model that hypothesizes the relationship between PPP project conflicts and project performance, with governance mechanisms as moderating variables. The empirical analysis tests the differential effects of process and outcome conflicts on project performance and examines how relational governance moderates these relationships under different conflict types. Findings The results show that process conflict has a significant positive impact on project performance, while outcome conflict has a significant negative impact. In terms of moderation effects, communication significantly positively influences the relationship between process conflict and project performance, while it has a significant negative impact on the relationship between outcome conflict and project performance. Research limitations/implications First, in the process of analyzing the mutual influence between conflicts and the performance level of PPP projects in this study, more emphasis was placed on the conflicts arising between the government and social capital as the main objects of analysis. Second, the focus of this study is only limited to the context of PPP projects in China. The results of this study are of reference value for the governments and social capital providers participating in PPP projects in similar contexts. However, it is currently unknown whether the research conclusions are applicable to other construction projects or the backgrounds of other countries. Third, governance in PPP projects is extremely complex, and a single governance mechanism cannot provide a comprehensive explanation. Therefore, in the future, more diverse governance means should be integrated to systematically examine the impacts of governance mechanisms on conflicts in PPP projects. Originality/value The research finding contributes to the literature on conflict management by exploring two types of organizational conflicts between the government and private sector. In addition, our findings offer new insights into the relationship between PPP project conflicts and project performance. Communication magnifies the positive effect of process conflict on project performance, while the moderating effect of trust is insignificant. By investigating the roles of trust and communication in project conflict practices in China, this research contributes to a better understanding of how to manage conflicts effectively in PPP projects.