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Nunzia Carbonara and Roberta Pellegrino

The prevailing view in the studies on Public Private Partnerships (PPPs) is that PPPs can improve the quality and efficiency of infrastructure services and facilitates innovation in infrastructure developments. Although researchers highlight the potentiality of PPP models for stimulating innovation, they do not prove whether and in which conditions the PPP model is capable of developing innovative solutions. This chapter aims at providing answers to the following key research questions: “Which features of PPP favor innovation?” and “How should a PPP be properly structured in order to foster innovation?” With this aim, drawing upon the main streams of studies on innovation, we develop a conceptual framework that identifies PPP factors that foster innovation and then formulate research hypotheses. An econometric analysis is then applied to empirically test the hypotheses. Our results have important implications for the future implementation of PPP projects, showing how PPP features have to be structured in order to foster innovation.