Procedural fairness and cooperation in public-private partnerships in China

Purpose - The paper aims to extend research on public-private partnerships (PPP) by exploring the path toward procedural justice and cooperation performance through contracts. Design/methodology/approach - The paper uses equity theory to address inter-partner cooperation in PPPs. The paper emphasizes how procedural fairness, as perceived by partners in a PPP, influences cooperation effects. Using both social exchange theory and transaction cost theory, it hypothesizes that procedural fairness improves cooperation effects by enhancing two kinds of contracts: the control-formal contract and the informal contract. Findings - The regression analysis suggests that procedural fairness indirectly affects three kinds of cooperation effects direct effects, knowledge-created effects, and social effects by increasing formal and informal contracts. Research limitations/implications - Further research might address the antecedents of procedural justice. Practical implications - The paper suggests that procedural justice is important to PPPs and that contracts mediate this relationship. Originality/value - The paper enriches PPP research, especially with regard to procedural formalization, contracts, and cooperation performance.