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.