Public-private partnerships (PPPs) have received considerable attention in the field of public management, business management, and strategy. However, researchers have mostly focused on public policies, public sector reform, and social problems, leaving how PPPs co-create value largely studied. Aiming at theorizing PPPs, this study reviews research on PPPs and value-based strategies including value co-creation and explores how PPPs co-create value. In our case study of Hwang Sun Enterprise in cultural and creative industries, we provide an understanding of how the focal firm initiated and governed a PPP with public sector (Tainan City Government) and academic sector (Kun Shan University Incubation Center), how the firm shifted from the role of manufacturer to service provider, and how the firm combined its core technologies from auto-machinery with salt culture from Anping, and how they co-created value. Based on induced framework, we specify a theoretical framework for value co-creation of PPPs and indicate that heterogeneity and public goods characteristics of PPPs have impacts on value co-creation. Combining co-specialized assets and dynamic capability of focal firm have moderating effects on how PPPs co-create value. Finally, theoretical contributions, implications, and limitations are discussed.