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The risks and uncertainties of public–private partnership (PPP) projects threaten their sustainability. Contract flexibility, which is based on the theory of incomplete contract and transaction cost, may be a viable solution to this issue. The purpose of this study is to investigate the relationship between contract flexibility and the sustainability performance of PPP projects. The multiple mediating roles of justice perception and cooperation efficiency are assessed, thereby allowing the pathways and conditions to be understood more comprehensively for improving the sustainability performance of PPP projects.

Nine hypotheses in the proposed research model are tested via structural equation modeling using data acquired from 218 Chinese PPP professionals.

Results show that contract flexibility positively affects PPP project sustainability performance. Justice perception and cooperation efficiency play direct and sequential mediating roles in this effect.

This study validates that contract flexibility positively impacts the sustainability performance of PPP projects, where justice perception and cooperation efficiency serve direct and sequential mediating roles. The findings of this study contribute to an improved understanding of the effect of contract flexibility on the sustainability performance of PPP projects. Furthermore, they provide important theoretical and practical insights into contract management as well as beneficial information and valuable initiatives for improving the sustainability of PPP projects.

This study aims to empirically test the effects of key characteristics of performance-based contracting (PBC) (i.e. reward/payment scheme, increased supplier autonomy and transfer of responsibilities) on supplier goal commitment.

This study developed a conceptual model applying goal-setting theory (GST), expectancy theory (ET) and job characteristics theory (JCT). Survey data were collected and analyzed using structural equation modeling (SEM) to establish a validated measurement instrument for testing the hypotheses.

The findings revealed that PBC positively affects supplier goal commitment due to its unique characteristics, which translates into improved supplier performance. Furthermore, this study validated the mediating role of goal alignment and felt accountability operating between PBC characteristics and supplier goal commitment.

This study explored the buyer–supplier relationship from the supplier's standpoint. Using a more inclusive data set, future research may involve a dyadic analysis and focus on the effects of the following factors on the supplier goal commitment: relational aspects (e.g. trust and collaboration), the risk transfer from the buyer to the supplier, different incentive schemes and successful PBC implementation factors.

This study presents new, validated insights for contract selection, design and management. It underlines the importance of choosing the proper contract, having the appropriate contract design based on the desired outcomes and effective contract management by exhibiting the psychological/behavioral effect of fundamental PBC characteristics.

PBC represents an active research stream, but its psychological/behavioral implications are understudied. Therefore, this research puts forth a conceptual framework with multiple testable hypotheses illustrating the relationship between PBC and supplier goal commitment.

With the continuous improvement of public–private partnership (PPP) projects, the participants' value creation goals are not only limited to achieving the basic performance objectives but also to realising value added. However, the effect of traditional contract management on realising the value creation objectives of PPP projects is limited. According to the view of multifunctional contract, joint-contract functions that integrate contract control and flexibility are likely to be effective in enhancing the value creation of PPP projects. This study aims to explore the effects of joint-contract functions on PPP project value creation and relevant influencing mechanism by investigating the mediating effect of in-role behaviour and extra-role behaviour.

After collecting 258 valid questionnaires from PPP professionals in China, this study used structural equation modelling to validate the hypotheses.

Contract control and flexibility can improve PPP project value creation. Specifically, contract control improves the achievement of the basic contract objectives of PPP projects, whereas contract flexibility enhances the achievement of the value-added of PPP projects. Moreover, only in-role behaviour mediates the effect of contract control on value creation. In addition, the mediating effect of extra-role behaviour on the impact of contract flexibility on value creation is stronger than that of in-role behaviour. The mediating effect of in- and extra-role behaviour is mainly reflected in the realisation of basic and value-added performance, respectively.

The findings of this study can help realise value creation in three ways. Firstly, new perspectives for PPP project value creation should be proposed by combining the improvement of contract objectives and the realisation of the participants' implicit demands. Secondly, the effects of different contract functions on value creation should be analysed instead of a single dimension of contractual governance. Thirdly, the mediating effects of different types of cooperation behaviour that may influence the relationship between contractual governance and value creation should be evaluated.

This study verifies the impacts of different contract functions on PPP project value creation. In addition, cooperative behaviour is embedded as a mediating variable, and the mediated transmission path from contract function to cooperative behaviour and further to PPP project value creation is systematically analysed.

The increasing prevalence of a wide range of infectious diseases, as well as the underwhelming results of vaccination rates that may be traced back to problems with vaccine procurement and distribution, have brought to the fore the importance of vaccine supply chain (VSC) management in recent years. VSC is the cornerstone of effective vaccination; hence, it is crucial to enhance its performance, particularly in low- and middle-income countries where immunization rates are not satisfactory.

In this paper, the authors focus on VSC performance improvement of India by proposing supply contracts under demand uncertainty. The authors propose three contracts – wholesale price (WSP), cost sharing (CS) and incentive mechanism (IM) for the government-operated immunization program of India.

The authors' findings indicate that IM is capable of coordinating the supply chain, whereas the other two contracts are inefficient for the government. To validate the model, it is applied to a real-world scenario of coronavirus disease 2019 (COVID-19) in India, and the findings show that an IM contract improves the overall efficiency of the system by 23.72%.

Previous studies focused mainly on the influenza VSC industry within developed nations. Nonetheless, there exists a dearth of literature pertaining to the examination of supply contracts and their feasibility for immunization programs that are administered by the government and aimed at optimizing societal benefits. The authors' findings can be beneficial to the immunization program of India to optimize their VSC cost.

While much of the literature testing for shirking by professional athletes have used performance metrics, some works have quantified shirking in dollar terms by comparing salary to estimated marginal revenue product (MRP). However, Ordinary Least Squares (OLS) approaches to measuring shirking by comparing salary to MRP have an endogeneity problem, as salary and contract length are determined simultaneously. We test for shirking in Major League Baseball (MLB) using an MRP approach, addressing this potential endogeneity.

This paper uses instrumental variables regression to address potential endogeneity using MLB season-level player and team data from 2010 to 2017.

Using OLS regression, the impact of an additional year of guaranteed contract on shirking is estimated at approximately $1m in 2010 US dollars, and the impact of having a long-term contract is estimated at $5m, estimates comparable to those in the literature. Using instrumental variables regression, these impacts increase to $1.6m and over $9m in 2010 dollars.

Given large, causal shirking estimates, profit maximizing sports organizations should take caution when negotiating long-term contracts. These findings also have important implications for other labor market settings where workers feel job security.

To our knowledge, this is the first work testing for shirking in sports using an MRP approach which uses instrumental variables regression to address potential endogeneity.

This article aims to establish a dynamic Energy Performance Contract (EPC) risk allocation model for commercial buildings based on the theory of Incomplete Contract. The purpose is to fill the policy vacuum and allow stakeholders to manage risks in energy conservation management by EPCs to better adapt to climate change in the building sector.

The article chooses a qualitative research approach to depict the whole risk allocation picture of EPC projects and establish a dynamic EPC risk allocation model for commercial buildings in China. It starts with a comprehensive literature review on risks of EPCs. By modifying the theory of Incomplete Contract and adopting the so-called bow-tie model, a theoretical EPC risk allocation model is developed and verified by interview results. By discussing its application in the commercial building sector in China, an operational EPC three-stage risk allocation model is developed.

This study points out the contract incompleteness of the risk allocation for EPC projects and offered an operational method to guide practice. The reasonable risk allocation between building owners and Energy Service Companies can realize their bilateral targets on commercial building energy-saving benefits, which makes EPC more attractive for energy conservation.

Existing research focused mainly on static risk allocation. Less research was directed to the phased and dynamic risk allocation. This study developed a theoretical three-stage EPC risk allocation model, which provided the theoretical support for dynamic EPC risk allocation of EPC projects. By addressing the contract incompleteness of the risk allocation, an operational method is developed. This is a new approach to allocate risks for EPC projects in a dynamic and staged way.

Public–private partnerships (PPPs) are notoriously prone to disputes among stakeholders, some of which may unduly jeopardize contract performance. Contract disputes arising in Iran are often due to inefficiency of PPP concession agreements and practice. This study presents a causal-predictive model of the root causes and preventive measures for inter-organization disputes to enhance the likelihood of achieving desirable performance in PPP projects.

A theoretical “causal-predictive” model was developed with fourteen hypotheses based on extant literature and contractual agency theory, which resulted in the creation of a pool of 110 published items. Data were obtained from a questionnaire survey with 75 valid responses, completed by 4 stratified groups of Iranian PPP experts. Partial least square structural equation modeling (PLS-SEM) was used for validating the proposed model via a case study.

Results reveal that the main three factors of PPP desirable performance are as follows: on-time project completion, high quality of activities/products and services for public satisfaction. Further, the most influential factors of the lifecycle problems, construction stage, and preferred risk allocation included risk misallocation, improper payment mechanism and failure to facilitate a timely approval process.

For researchers, the findings contribute to the theory of contractual agency; specifically, how different influences among the model's elements lead to better PPP performance. In practical terms, proposed outcome-based strategies will inform PPP stakeholders to avoid dispute occurrence and thus improve the time, quality and services of projects.

Performance-based contracting (PBC) has been gaining popularity over the years. However, empirical studies investigating the impact of PBC features have been limited. The main purpose of this study is to investigate the effect of PBC features leading to quality investment that fosters financial benefits.

After examining the validity and reliability of scale items through confirmatory factor analysis, this study tested hypotheses using covariance-based structural equation modeling of survey data from 381 supply, logistics and operations managers.

The findings reveal the impact of PBC features (joint knowledge generation, goal congruence and incentive alignment) on financial benefits and the mediation impact of quality investment between these features and financial benefits. The upfront investment for quality enhancement was found facilitator of PBC features to achieve financial benefits. The findings also reveal the importance of collaborative communication and information sharing for knowledge generation that leads financial benefits through quality investment. This study shows that PBC governance strengthens the theory of relational view by empowering collaborative efforts and aligning goals and incentives within downstream suppliers for knowledge generation and quality enhancement.

An analysis of PBC features by industry would be very beneficial in differentiating between and more thoroughly understanding the commonalities and differences across various sectors. Investigating how these change across industries would also help identify any bias in PBC implementation.

This study illustrates that it will be practical and beneficial for suppliers to understand the major drivers of quality investment and the relationship between quality investment and the financial benefits of selecting PBC.

Unlike most previous studies, this research contributes to the literature in that it is one of the relatively few examples of empirical research on PBC features. Overall, the findings of this study will improve our understanding of how PBC features enhance upfront investment in quality and improve financial benefits.

There is growing scholarly interest in the use of penalty in employment contracts which reduce employees' pay if the employee's performance does not meet a pre-specified performance threshold. Prior accounting research has focused exclusively on the effect of penalty on employee performance. In this study, the authors extend earlier research by examining how penalty affects the employers' wage offers. Prior research suggests that employers' generous wage offers in employment contracts are normally translated as trust by employees who in turn reciprocate with higher effort. The authors present a theory that predicts penalty reduces employers' wage offers. Then, the authors propose unrestricted communication between employers and employees as a potential moderator for the negative effect of penalty on trust and reciprocity.

The authors implement a controlled lab experiment with a 2 × 3 experimental design (Penalty: Present and Absent; and Communication: None, One-Way and Two-Way).

The authors develop their predictions by utilizing insights from motivational-crowding and organizational communication theories. The authors hypothesize and find evidence that employers' ability to penalize employees can reduce employers' motivation to offer generous wages. As a result, reduced trust demotivates employees to provide high effort. However, the authors find that a two-way communication moderates the negative effect of penalties by restoring trust, thereby, increasing reciprocity. Finally, the authors find evidence that relationship-oriented messages explain the moderating effect of communication.

This study is subject to limitations inherent in all experimental studies. The decisions in the study experiment are less complex than those found in practice. Moreover, there are significantly higher costs and potential benefits to shirk on effort in practice. The authors encourage future research on other organizational features that would influence the generalizability of their theory and results. Nonetheless, this study makes an important contribution to the literature on trust, reciprocity, gift-exchange contracts, managerial controls and communication.

This paper has several important implications for theory and practice. The authors show that the presence of penalty may not automatically result in increasing employees' effort level, contrary to traditional economic theory predictions. This effect is driven mainly by the crowding out effect of a penalty on employers' desire to signal trust. Therefore, the presence of an open communication channel may become an important tool to reverse the psychological effect of reduced trust when penalty is present. Therefore, the study's findings contribute to the trust–reciprocity literature on how management control system influences employers' and employees' behavior. These findings are especially germane given the trend in the workplace toward establishing open communication at different levels within the firm hierarchy. The study also contributes to the literature on trust–reciprocity as critical informal controls and social norms in accounting practices (Bicchieri, 2006; Stevens, 2019), shedding light on how firms may influence employees' reciprocity in management control practices and induce them to act in line with the firm's objectives by opening communication channels.

Prior accounting research document that penalty in employment contracts increases employee performance due to loss aversion. The study, however, demonstrates that the positive effect of penalty is not sustained in a gift-exchange contract. Specifically, the study's experimental results provide evidence that the availability of penalties can psychologically change the way employers perceive their decisions on offering generous wages (i.e. trust) and consequently reduce employees' reciprocation of high effort levels. Yet, the authors propose a two-way communication as a restorative mechanism for the lost trust. Implications for theory and practice are discussed.

In this vein, this paper aims to provide empirical evidence on the following questions: Which expansion strategies offer better operational and economic performance? What effects does performance-related diversification have? How do other factors such as size, quality, service offered, location or seasonality interact with performance.

In this paper, the analysis of the effects of growth strategies and hotel attributes on performance is carried out with a sample of 255 hotels that operate internationally. Using panel data and quantile regression, this study evaluates the effect of expansion and diversification on the hotels’ performance.

From these findings, it appears that the equity strategy (own hotels) outperforms non-equity strategies (hotels under rental, franchise and management contract) at the operational level. However, the economic return of the property, both adjusted and unadjusted to risk, is lower under the property ownership strategy than under the franchise and management strategies because, in general, it requires a higher investment. Regarding diversification, the growth strategy based on related diversification in food and beverage services has a negative impact on performance, calling into question the synergies between the two businesses. However, an exception to this effect is seen among those hotels, mainly those in the Caribbean, that opt to provide all-inclusive services, since these hotels achieve better occupancy rates and more stable results.

This study has not taken into account the effect of hotel property revaluation on the performance of the ownership strategy, as there is no information on the historical average revaluation at the level of each individual hotel. This study has also been unable to include information regarding the level of competition and seasonality of sales.

This paper considers a wide number of factors that can influence the performance of hotels. Second, this is the only paper that studies the impact of growth strategies from the point of view of the hotel chain. Also, the sample considered uses data at the individual level on hotels and this research analyses not only operational performance but also economic performance.