Investors’ rational conformity to government’s excessive behavior in PPP project: Forms and measurement
Abstract
In PPP projects, there is a tendency for investors to follow the government’s excessive behavior, which is not conducive to controlling the behavior risks of the project. Due to the differences in conformity purposes, it is important to determine the form and tendency of investor conformity to understand the reasons for conformity and propose control suggestions. Referring to the research of Song et al., the study constructs an initial scale that investor’s rational conformity to the government’s excessive behavior. 269 and 244 data are used for the pre-test and validation of the scale, respectively. After adjusting the scale and analyzing reliability and validity by using SPSS and AMOS, the forms of investor conformity are divided into abidance, compliance, and obedience. Meanwhile, the measurement scales of three conformity tendencies are determined. These findings are conducive to quantitatively evaluating the risk level of investors’ conformity and deepening managers’ understanding of rational investor conformity, which is beneficial for reducing the risk of investor conformity and thus reducing the risk of the government’s excessive behavior.
Keyword : PPP project, investor’ rational conformity, government’s excessive behavior, scale
How to Cite
Liu, J., Liu, H., Bu, Z., He, P., & Liu, J. (2024). Investors’ rational conformity to government’s excessive behavior in PPP project: Forms and measurement. International Journal of Strategic Property Management, 28(4), 261–271. https://doi.org/10.3846/ijspm.2024.21824
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Bikhchandani, S., & Sharma, S. (2001). Herd behavior in financial markets. IMF Staff Papers, 47(3), 279–310. https://doi.org/10.2307/3867650
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Che, H. S., Yang, L. Q., Zhu, M., & Wang, X. H. (2002). Analysis of latent categories of individual investors in Chinese stock markets. Journal of Management Sciences in China, 5(5), 23–29.
Demirer, R., Kutan, A. M., & Chen, C. D. (2010). Do investors herd in emerging stock markets? Evidence from the Taiwanese market. Journal of Economic Behavior and Organization, 76(2), 283–295. https://doi.org/10.1016/j.jebo.2010.06.013
Devenow, A., & Welch, I. (1996). Rational herding in financial economics. European Economic Review, 40(3–5), 603–615. https://doi.org/10.1016/0014-2921(95)00073-9
Dorfeshan, Y., Taleizadeh, A. A., & Toloo, M. (2022). Assessment of risk-sharing ratio with considering budget constraint an disruption risk under a triangular Pythagorean fuzzy environment in public-private partnership projects. Expert Systems with Application, 223, Article 117245. https://doi.org/10.1016/j.eswa.2022.117245
Easen, P., & Wilcockson, J. (1996). Intuition and rational decision-making in professional thinking: A false dichotomy? Journal of Advanced Nursing, 24(4), 667–673. https://doi.org/10.1046/j.1365-2648.1996.02413.x
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Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50. https://doi.org/10.1177/002224378101800104
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Greene, K., & Krcmar, M. (2005). Predicting exposure to and liking of media violence: A uses and gratifications approach. Communication Studies, 56(1), 71–93. https://doi.org/10.1080/0008957042000332250
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Li, H., Su, L., Zuo, J., Zhao, X., Chang, R., & Wang, F. (2022). Incentive mechanism for performance-based payment of infrastructure PPP projects: Coupling of reputation and ratchet effects. International Journal of Strategic Property Management, 26(1), 35–55. https://doi.org/10.3846/ijspm.2022.15969
Li, Y., He, N., Zhang, Y., Li, H., & Zhang C. (2023). Optimization of capital structure for urban water PPP projects using mezzanine financing: Sustainable perspective. Journal of Construction Engineering and Management, 149(8), Article 04023059. https://doi.org/10.1061/JCEMD4.COENG-12830
Lim, B. T. H., & Loosemore, M. (2017). The effect of inter-organizational justice perceptions on organizational citizenship behaviors in construction projects. International Journal of Project Management, 35(2), 95–106. https://doi.org/10.1016/j.ijproman.2016.10.016
Lin, W. T., Tsai, S. C., & Lung, P. Y. (2013). Investors’ herd behavior: Rational or irrational? Asia-Pacific Journal of Financial Studies, 42(5), 755–776. https://doi.org/10.1111/ajfs.12030
Liu, J., He, P., & Meng, Q. (2023). Meeting investors’ demands in PPP project to improve enthusiasm for participating in green and low-carbon. Economic Research-Ekonomska Istraživanja, 36(1), Article 2167224. https://doi.org/10.1080/1331677X.2023.2167224
Liu, J. Q., & Liu, J. C. (2024). The demand hierarchy of the government and investors in PPP projects. Engineering, Construction and Architectural Management, 31(4), 1539–1555. https://doi.org/10.1108/ECAM-01-2022-0052
Liu, J. Q., Liu, J. C., Bu, Z, H., Zhou, Y. N., & He, P. F. (2022). Path analysis of influencing government’s excessive behavior in PPP project: Based on field dynamic theory. Transportation Research Part A: Policy and Practice, 166, 522–540. https://doi.org/10.1016/j.tra.2022.11.011
Lu, J. Q. (2007). An empirical study on the herd behavior of Chinese securities investors. Psychological Science, 30(2), 431–433.
Luo, Q., Gao, R., Liu, J., & Li, Y. (2022). Path analysis on escalation of commitment of investors in different project scenarios of PPPs. International Journal of Strategic Property Management, 26(2), 127–140. https://doi.org/10.3846/ijspm.2022.16477
Narbaev, T. (2022). A meta-analysis of the public-private partnership literature reviews: Exploring the identity of the field. International Journal of Strategic Property Management, 26(4), 318–331. https://doi.org/10.3846/ijspm.2022.17860
Osei-Kyei, R., & Chan, A. P. C. (2017). Comparative analysis of the success criteria for public-private partnership projects in Ghana and Hong Kong. Project Management Journal, 48(4), 80–92. https://doi.org/10.1177/875697281704800407
Osei-Kyei, R., Jin, X., Nnaji, C., Akomea-Frimpong, I., & Wuni, I. Y. (2023). Review of risk management studies in public-private partnerships: A scientometric analysis. International Journal of Construction Management, 23(14), 2419–2430. https://doi.org/10.1080/15623599.2022.2063013
Pellegrino, R. (2021). Effects of public supports for mitigating revenue risk in public–private partnership projects: Model to choose among support alternatives. Journal of Construction Engineering and Management, 147(12), Article 04021167. https://doi.org/10.1061/(ASCE)CO.1943-7862.0002098
Podsakoff, P. M., & Organ, D. W. (1986). Self-reports in organizational research: Problems and prospects. Journal of Management, 12(4), 531–544. https://doi.org/10.1177/014920638601200408
Seyal, A., Rahman, M. N. A., & Rahim, M. M. (2002). Determinants of academic use of the internet: A structural equation model. Behaviour & Information Technology, 21(1), 71–86. https://doi.org/10.1080/01449290210123354
Song, G. D. (2004). An investigative study on conformity. Psychological Science, 27(3), 657–661.
Song, G. D. (2005). A new view on conformability. Psychological Science, 28(5), 1174–1178.
Song, G., Ma, Q., Wu, F., & Li, L. (2012). The psychological explanation of conformity. Social Behavior & Personality an International Journal, 40(8), 1365–1372. https://doi.org/10.2224/sbp.2012.40.8.1365
Su, L., Cao, Y., & Li, H. (2023). Performance-based payment structural design for infrastructure PPP projects. International Journal of Strategic Property Management, 27(2), 133–145. https://doi.org/10.3846/ijspm.2023.19180
Sun, G., Sun, J., & Li, F. (2022). Influencing factors of early termination for PPP projects based on multicase grounded theory. Journal of Construction Engineering and Management, 148(11), Article 04022120. https://doi.org/10.1061/(ASCE)CO.1943-7862.0002388
Song, G. D., Yang, Z. T., & Cui, M. (2008). A psychological study of obedience in psychology. Journal of Psychological Science, 31(1), 249–252.
Stevens, J. (2010). Applied multivariate statistics for the social sciences. Garden City, 52(3), 418–420. https://doi.org/10.1111/1467-9884.00369_23
Tang, H., Zhu, R., Liang, Z., Zhang, S., Su, S., & Liu, C. (2023). Enhancing and weakening conformity in third-party punishment: The role of empathic concern. Journal of Behavioral Decision Making, 36(4), Article e2315. https://doi.org/10.1002/bdm.2315
Tinsley, H. E., & Tinsley, D. J. (1987). Uses of factor analysis in counseling psychology research. Journal of Counseling Psychology, 34(4), 414–424. https://doi.org/10.1037/0022-0167.34.4.414
Wang, Y., Gao, H. O., & Liu, J. C. (2019). Incentive game of investor speculation in PPP highway projects based on the government minimum revenue guarantee. Transportation Research Part A: Policy and Practice, 125(7), 20–34. https://doi.org/10.1016/j.tra.2019.05.006
Wang, Y., & Gao, R. (2020). Risk distribution and benefit analysis of PPP projects based on public participation. International Journal of Strategic Property Management, 24(4), 215–225. https://doi.org/10.3846/ijspm.2020.12329
Xing, H., Li, Y., & Li, H. (2020). Renegotiation strategy of public-private partnership projects with asymmetric information – An evolutionary game approach. Sustainability, 12(7), Article 2646. https://doi.org/10.3390/su12072646
Xiong, W., & Han, Y. (2023). Incentives of early termination compensation in public-private partnership projects. IEEE Transactions on Engineering Management, 70, 2220–2232. https://doi.org/10.1109/TEM.2021.3074662
Xu, Z., Yin, Y., Li, D., & Browne, G. J. (2018). Owner’s risk allocation and contractor’s role behavior in a project: A parallel-mediation model. Engineering Management Journal, 30(1), 14–23. https://doi.org/10.1080/10429247.2017.1408388
Yang, H., Zheng, Q., Li, M., & Sun, Y. (2015). How to avoid herd behavior: A stochastic multi-choice scheduling algorithm and parameters analysis in grid scheduling. International Journal of Information Technology & Decision Making, 14(2), 287–315. https://doi.org/10.1142/S0219622014500734
Ameyaw, C., Adjei-Kumi, T., & Owusu-Manu, D. G. (2015). Exploring value for money (VFM) assessment methods of public-private partnership projects in Ghana: A theoretical framework. Journal of Financial Management of Property and Construction, 20(3), 268–285. https://doi.org/10.1108/JFMPC-01-2015-0003
Basarir, A., & Yilmaz, Z. (2019). Herd behavior and its effects on the purchasing behavior of investors. Contemporary Studies in Economic and Financial Analysis, 101, 215–226. https://doi.org/10.1108/S1569-375920190000101015
Bian, J., & Li, X. (2009). Corporate investment decision under irrationality – A behavioral corporate finance explanation of inefficient investment. China Industrial Economics, 7, 152–160.
Bikhchandani, S., & Sharma, S. (2001). Herd behavior in financial markets. IMF Staff Papers, 47(3), 279–310. https://doi.org/10.2307/3867650
Cai, F., Mo, J., Xie, L., & Ye, H. (2021). Research on performance management of PPP project in China. Research in Economics and Management, 6(1), 96–104. https://doi.org/10.22158/rem.v6n1p96
Carbonara, N., Costantino, N., & Pellegrino, R. (2014). Concession period for PPPs: A win–win model for a fair risk sharing. International Journal of Project Management, 32(7), 1223–1232. https://doi.org/10.1016/j.ijproman.2014.01.007
Che, H. S., Yang, L. Q., Zhu, M., & Wang, X. H. (2002). Analysis of latent categories of individual investors in Chinese stock markets. Journal of Management Sciences in China, 5(5), 23–29.
Demirer, R., Kutan, A. M., & Chen, C. D. (2010). Do investors herd in emerging stock markets? Evidence from the Taiwanese market. Journal of Economic Behavior and Organization, 76(2), 283–295. https://doi.org/10.1016/j.jebo.2010.06.013
Devenow, A., & Welch, I. (1996). Rational herding in financial economics. European Economic Review, 40(3–5), 603–615. https://doi.org/10.1016/0014-2921(95)00073-9
Dorfeshan, Y., Taleizadeh, A. A., & Toloo, M. (2022). Assessment of risk-sharing ratio with considering budget constraint an disruption risk under a triangular Pythagorean fuzzy environment in public-private partnership projects. Expert Systems with Application, 223, Article 117245. https://doi.org/10.1016/j.eswa.2022.117245
Easen, P., & Wilcockson, J. (1996). Intuition and rational decision-making in professional thinking: A false dichotomy? Journal of Advanced Nursing, 24(4), 667–673. https://doi.org/10.1046/j.1365-2648.1996.02413.x
Esen, E. (2013). The influence of corporate social responsibility (CSR) activities on building corporate reputation. Advances in Sustainability & Environmental Justice, 11, 133–150. https://doi.org/10.1108/S2051-5030(2013)0000011010
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50. https://doi.org/10.1177/002224378101800104
Gao, R. L., & Liu, J. C. (2020). Value of investors’ escalation of commitment in PPP projects using real option thinking. International Journal of Strategic Property Management, 24(5), 348–364. https://doi.org/10.3846/ijspm.2020.13120
Greene, K., & Krcmar, M. (2005). Predicting exposure to and liking of media violence: A uses and gratifications approach. Communication Studies, 56(1), 71–93. https://doi.org/10.1080/0008957042000332250
Guo, J., Chen, J., & Xie, Y. (2022). Determining a reasonable concession period for risky transportation BOT projects with government subsidies based on cumulative prospect theory. Engineering Construction & Architectural Management, 29(3), 1396–1426. https://doi.org/10.1108/ECAM-11-2019-0612
Jiang, D., Xu, F. M., Chen, X. L., Liu, T. F., & Zhang, J. W. (2010). The psychological mechanism and influence factors of herd behavior of investors in the capital market. Advances in Psychological Science, 18(5), 810–818.
Ke, Y. J., Wang, S. Q., & Chan, A. P. C. (2013). Risk misallocation in public-private partnership projects in China. International Public Management Journal, 16(3), 438–460. https://doi.org/10.1080/10967494.2013.825508
Li, H., Su, L., Zuo, J., Zhao, X., Chang, R., & Wang, F. (2022). Incentive mechanism for performance-based payment of infrastructure PPP projects: Coupling of reputation and ratchet effects. International Journal of Strategic Property Management, 26(1), 35–55. https://doi.org/10.3846/ijspm.2022.15969
Li, Y., He, N., Zhang, Y., Li, H., & Zhang C. (2023). Optimization of capital structure for urban water PPP projects using mezzanine financing: Sustainable perspective. Journal of Construction Engineering and Management, 149(8), Article 04023059. https://doi.org/10.1061/JCEMD4.COENG-12830
Lim, B. T. H., & Loosemore, M. (2017). The effect of inter-organizational justice perceptions on organizational citizenship behaviors in construction projects. International Journal of Project Management, 35(2), 95–106. https://doi.org/10.1016/j.ijproman.2016.10.016
Lin, W. T., Tsai, S. C., & Lung, P. Y. (2013). Investors’ herd behavior: Rational or irrational? Asia-Pacific Journal of Financial Studies, 42(5), 755–776. https://doi.org/10.1111/ajfs.12030
Liu, J., He, P., & Meng, Q. (2023). Meeting investors’ demands in PPP project to improve enthusiasm for participating in green and low-carbon. Economic Research-Ekonomska Istraživanja, 36(1), Article 2167224. https://doi.org/10.1080/1331677X.2023.2167224
Liu, J. Q., & Liu, J. C. (2024). The demand hierarchy of the government and investors in PPP projects. Engineering, Construction and Architectural Management, 31(4), 1539–1555. https://doi.org/10.1108/ECAM-01-2022-0052
Liu, J. Q., Liu, J. C., Bu, Z, H., Zhou, Y. N., & He, P. F. (2022). Path analysis of influencing government’s excessive behavior in PPP project: Based on field dynamic theory. Transportation Research Part A: Policy and Practice, 166, 522–540. https://doi.org/10.1016/j.tra.2022.11.011
Lu, J. Q. (2007). An empirical study on the herd behavior of Chinese securities investors. Psychological Science, 30(2), 431–433.
Luo, Q., Gao, R., Liu, J., & Li, Y. (2022). Path analysis on escalation of commitment of investors in different project scenarios of PPPs. International Journal of Strategic Property Management, 26(2), 127–140. https://doi.org/10.3846/ijspm.2022.16477
Narbaev, T. (2022). A meta-analysis of the public-private partnership literature reviews: Exploring the identity of the field. International Journal of Strategic Property Management, 26(4), 318–331. https://doi.org/10.3846/ijspm.2022.17860
Osei-Kyei, R., & Chan, A. P. C. (2017). Comparative analysis of the success criteria for public-private partnership projects in Ghana and Hong Kong. Project Management Journal, 48(4), 80–92. https://doi.org/10.1177/875697281704800407
Osei-Kyei, R., Jin, X., Nnaji, C., Akomea-Frimpong, I., & Wuni, I. Y. (2023). Review of risk management studies in public-private partnerships: A scientometric analysis. International Journal of Construction Management, 23(14), 2419–2430. https://doi.org/10.1080/15623599.2022.2063013
Pellegrino, R. (2021). Effects of public supports for mitigating revenue risk in public–private partnership projects: Model to choose among support alternatives. Journal of Construction Engineering and Management, 147(12), Article 04021167. https://doi.org/10.1061/(ASCE)CO.1943-7862.0002098
Podsakoff, P. M., & Organ, D. W. (1986). Self-reports in organizational research: Problems and prospects. Journal of Management, 12(4), 531–544. https://doi.org/10.1177/014920638601200408
Seyal, A., Rahman, M. N. A., & Rahim, M. M. (2002). Determinants of academic use of the internet: A structural equation model. Behaviour & Information Technology, 21(1), 71–86. https://doi.org/10.1080/01449290210123354
Song, G. D. (2004). An investigative study on conformity. Psychological Science, 27(3), 657–661.
Song, G. D. (2005). A new view on conformability. Psychological Science, 28(5), 1174–1178.
Song, G., Ma, Q., Wu, F., & Li, L. (2012). The psychological explanation of conformity. Social Behavior & Personality an International Journal, 40(8), 1365–1372. https://doi.org/10.2224/sbp.2012.40.8.1365
Su, L., Cao, Y., & Li, H. (2023). Performance-based payment structural design for infrastructure PPP projects. International Journal of Strategic Property Management, 27(2), 133–145. https://doi.org/10.3846/ijspm.2023.19180
Sun, G., Sun, J., & Li, F. (2022). Influencing factors of early termination for PPP projects based on multicase grounded theory. Journal of Construction Engineering and Management, 148(11), Article 04022120. https://doi.org/10.1061/(ASCE)CO.1943-7862.0002388
Song, G. D., Yang, Z. T., & Cui, M. (2008). A psychological study of obedience in psychology. Journal of Psychological Science, 31(1), 249–252.
Stevens, J. (2010). Applied multivariate statistics for the social sciences. Garden City, 52(3), 418–420. https://doi.org/10.1111/1467-9884.00369_23
Tang, H., Zhu, R., Liang, Z., Zhang, S., Su, S., & Liu, C. (2023). Enhancing and weakening conformity in third-party punishment: The role of empathic concern. Journal of Behavioral Decision Making, 36(4), Article e2315. https://doi.org/10.1002/bdm.2315
Tinsley, H. E., & Tinsley, D. J. (1987). Uses of factor analysis in counseling psychology research. Journal of Counseling Psychology, 34(4), 414–424. https://doi.org/10.1037/0022-0167.34.4.414
Wang, Y., Gao, H. O., & Liu, J. C. (2019). Incentive game of investor speculation in PPP highway projects based on the government minimum revenue guarantee. Transportation Research Part A: Policy and Practice, 125(7), 20–34. https://doi.org/10.1016/j.tra.2019.05.006
Wang, Y., & Gao, R. (2020). Risk distribution and benefit analysis of PPP projects based on public participation. International Journal of Strategic Property Management, 24(4), 215–225. https://doi.org/10.3846/ijspm.2020.12329
Xing, H., Li, Y., & Li, H. (2020). Renegotiation strategy of public-private partnership projects with asymmetric information – An evolutionary game approach. Sustainability, 12(7), Article 2646. https://doi.org/10.3390/su12072646
Xiong, W., & Han, Y. (2023). Incentives of early termination compensation in public-private partnership projects. IEEE Transactions on Engineering Management, 70, 2220–2232. https://doi.org/10.1109/TEM.2021.3074662
Xu, Z., Yin, Y., Li, D., & Browne, G. J. (2018). Owner’s risk allocation and contractor’s role behavior in a project: A parallel-mediation model. Engineering Management Journal, 30(1), 14–23. https://doi.org/10.1080/10429247.2017.1408388
Yang, H., Zheng, Q., Li, M., & Sun, Y. (2015). How to avoid herd behavior: A stochastic multi-choice scheduling algorithm and parameters analysis in grid scheduling. International Journal of Information Technology & Decision Making, 14(2), 287–315. https://doi.org/10.1142/S0219622014500734