Abstract
There is a general belief that the institutional environment significantly challenges the performance and sustainability of public-private partnerships. However, little is known about how partners can encounter and overcome such a challenge. The objective of this study was to investigate partners' practices of Institutional Orientation, particularly in terms of Institutional Embeddedness, Market Legitimacy, Key Institutional Customers Concept, and their impacts on Partnership Performance. Relational Risk (i.e. Relational Capital, Flexibility, and Conflict) was also examined to demonstrate its mediating role in this relationship. Data were obtained from 290 experts, managers, and core employees who worked in a failed destination management system partnership in Egypt. Using structural equation modeling, the study reveals that Institutional Orientation practices enable partners to effectively understand and maintain the institutional environment, mitigate Relational Risk behaviors, and consequently enhance partnership's chances to develop and operate more efficiently.
•Finds strong relations between Institutional Orientation (IO) and PPP Performance.•Relational Capital, Flexibility, and Conflict partially mediate the effect of IO on PPP.•IO facilitates collaboration behaviors and mitigates Relational Risk between partners.