Abstract: The Public Private Partnership is conducive to alleviating the financing difficulties of infrastructure constructions by local government; but if PPP projects are mismanaged or grow excessively, implicit debt risk of local governments may be formed. The implicit debt of local governments in PPP mode includes direct implicit debt and indirect implicit debt. Based on the analysis of the institutional risk points in the whole life cycle of PPP projects, a spatial measurement research on the basis of the dual structure theory of spatial structure and institutional structure can explain the influence of the institutional structure variables more significantly. The findings of the spatial econometric studies indicate that the total amount of PPP projects has the most significant positive effect on the implicit debt risks of local governments, and the proportion of the executed PPP projects in the total projects has the most significant negative effect on the implicit debt risks of local governments. Between most provinces and their neighboring provinces there are four different spatial aggregation effects, i.e., high-high, low-low, high-low and low-high. Therefore, in order to prevent the implicit debt risks of local governments induced by PPP, it is necessary to strengthen the monitoring of high-risk provinces and strictly prevent the spillover of the implicit debt risks, strengthen the discrimination of various PPP projects at various regions in an orderly way and establish a monitoring platform for the implicit debt risks of local governments, and increase inter-provincial cooperation to deal with the implicit debt risks.

Key words: Public Private Partnership, implicit debt of local governments, debt risks, spatial econometric model