Appraising institutional quality drivers of private capital participation in public–private partnership by dynamic qualitative comparative analysis

The Belt and Road Initiative (BRI) has been recognized for its significant contribution to infrastructure development in countries along its routes. However, challenges to private capital participation in public–private partnerships (PPP) are introduced by the complex institutional environment. Therefore, it is essential that the influence of institutional quality on private investment and its multifactorial effects be examined. In this study, 2854 PPP projects across 40 countries within the BRI corridor from 2009 to 2020 were analyzed using dynamic qualitative comparative analysis (QCA) to assess changes in institutional quality before and after the BRI's implementation. Dynamic QCA extends traditional QCA by incorporating a temporal dimension, enabling the examination of causal patterns and evolutionary mechanisms in complex social phenomena across time. The findings indicate that no single institutional quality factor is a necessary condition for high private capital participation, although the rule of law emerges as a critical core condition within the configuration paths. Prior to the BRI, institutional quality primarily followed a 'top-down' model, which evolved into a 'top-down and bottom-up' synergistic approach after its implementation. While institutional quality plays a crucial role, its limitations in consistently attracting private capital to PPP projects are evident. These findings provide important insights for improving institutional environments to better attract private capital.