Research on PPP-ABS projects hesitant fuzzy multi-criteria investment decision-making with prospect theory and VIKOR method

Abstract

The asset-backed securitization of public-private partnership (PPP-ABS) provides new opportunities to achieve the infrastructure sustainable development goals (SDGs). It is considered to be a refinancing instrument for PPP projects and an alternative investment instrument for institutional investors. Compared with other investment instruments, PPP-ABS has many investment advantages. However, PPP-ABS investment is a multi-criteria decision-making (MCDM) problem. In order to explore the factors influencing PPP-ABS investment and how institutional investors making decision, an empirical study is conducted in this paper. Firstly, the critical external factors influencing PPP-ABS investment decision-making, including investment environment, the stability of PPP projects' cash flow, asset-backed securitization (ABS) design, and relevant parties' dutiful and contractual capacity, were identified through literature review. Then, the hesitant fuzzy numbers were used to describe the criteria values and the dispersion rate of hesitant fuzzy numbers was used to determine the criteria weights. Next, the prospect theory was used to evaluate the alternative projects' value and the VIKOR method was used to rank the projects and determine the optimal project. Finally, five PPP-ABS projects from different industries were selected for a case study, verifying the feasibility and effectiveness of the proposed method. All above studies are expected to provide helpful reference for institutional investors' investment decision-making. In addition, we proposed some practical and feasible suggestions which can protect investors' rights and also promote the sustainable development of PPP-ABS.