Factors That Affect Transaction Costs in Construction Projects

Li, Huimin; Arditi, David; Wang, Zhuofu

doi:10.1061/(asce)co.1943-7862.0000573

Cited by 90 publications

(99 citation statements)

References 45 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Environmental factors involve the manner in which the contract and construction are carried out. In other words, the characteristics of the transaction environment and of the efficiency of project management have significant impact on transaction costs (Li et al, 2013).…”

Section: Methodsmentioning

confidence: 99%

“…These costs are known as transaction costs in the study of economic organizations (Coase, 1937). However, it is not clear whether transaction costs can be reduced, mainly because they are not defined systematically (Li et al, 2013). Also, it is not clear whether transaction costs are higher at the pre-or post-contract phases of a construction project, in private or public projects, in different project delivery systems, and different types of contracts.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Transaction costs incurred by construction owners

Arditi²,

Wang³

2014

Engineering, Construction and Architectural Management

Self Cite

View full text Add to dashboard Cite

Determining the relationship between conflict factors and performance of international construction projects", Engineering, Construction and Architectural Management, Vol. 21 Iss 4 pp. 369-382 http:// dx.If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -Transaction costs arise from economic exchange rather than production activities. However, the term "transaction cost" is not consistently defined in the construction industry because the concept of transaction cost is not universally accepted by all stakeholders in construction projects. As a result, empirical studies are few and conflicting because accessing data on transaction costs is problematic, and the interpretation of the data is difficult. The purpose of this paper is to analyze the transaction costs borne by the owner in a construction project from the perspective of transaction cost economics and construction project characteristics. Design/methodology/approach -A questionnaire survey was administered to construction owners. The factors that impact transaction costs were analyzed in the context of human-related issues (the owner's and the contractor's positions in the transaction), and environment-related issues (the transaction environment, and project management efficiency). Statistical analyses were conducted to compare the transaction costs incurred in the pre-vs post-contract phases of a project relative to the private vs public sector, different project delivery systems, different procurement methods, and different types of contracts. Findings -The owners surveyed believe that transaction costs may be reduced if the owner and the contractor follow some basic guidelines (e.g. experience in similar projects, prompt payment, good relationship with project participants, no irregularities in bidding, and only few material substitutions and claims), if the project is well-run (e.g. technical competency, strong leadership, prompt decision-making, effective communication, and fair/speedy conflict management), and if the transaction environment is favorable (e.g. fair risk allocation, early contractor involvement, and complete design documents). The findings of the survey also indicate that post-contract transaction costs are much higher than pre-contract tran...

show abstract

Section: Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Transaction costs incurred by construction owners

Arditi²,

Wang³

2014

Engineering, Construction and Architectural Management

Self Cite

View full text Add to dashboard Cite

show abstract

“…Uncertainties in this study are considered external and internal factors that affect the success and performance of a project (Walker and Pryke, 2009;Jin and Zhang, 2011;Li et al, 2013).…”

Section: Literature Review 21 Tcs In Constructionmentioning

confidence: 99%

“…Also, the measurement portion of the model is examined so that every latent variable has its scale. For acceptable model fits, the goodness-of-fit index (GFI) should be W 0.9; the adjusted goodness-of-fit index (AGFI) W 0.8; the parsimonious goodness-of-fi index (PGFI) W 0.5; the root mean square residual (RMR) should be < 0.09; and the relative value of χ 2 ( χ 2 /df) should be < 3.0 (Hair et al, 2012;Li et al, 2013). Table III shows that all the parameters except RMR are within the recommended limits for good fit model, which means that the traditional and design-build models fits the data well.…”

Section: Model Goodness-of-fit Evaluationmentioning

confidence: 99%

Estimating transaction costs in the New Zealand construction procurement

Rajeh

Tookey

Rotimi

2015

Engineering, Construction and Architectural Management

View full text Add to dashboard Cite

Purpose -Within construction procurement, transaction cost economics offers a mechanism to understand "unseen" costs associated with the pre-and post-contract work. Pre-contract, these include costs related to information gathering and procurement. Post-contract they include activities of contract administration and enforcement. The purpose of this paper is to estimate the magnitude of transaction costs (TCs) for different procurement systems used in construction projects in New Zealand. Specifically estimating the relative values of TCs for Traditional and Design-Build delivery systems for the purpose of comparison. Design/methodology/approach -This study develops a conceptual model for the relationship between procurement systems and TC. The model was operationalized and developed into a questionnaire. A cross-sectional sample approach was deployed, involving pilot and survey questionnaires, and results verification through "real world" cases. Data were sought from construction professionals in management, design and operations (i.e. project managers, architects, engineers, quantity surveyors, and procurement officers). TCs were measured using time-spent conducting procurement-related activities as a surrogate for cost. Professionals evaluate their time-spent in procurement activities using a Likert scale 1-5, comparing the Traditional and Design-Build delivery systems. Data were triangulated with "real world" cases to test and explain the developed model. The test included validity and reliability, path analysis, regression analysis, factor analysis, and structural equation modelling (SEM). The primary analytical technique used was SEM to yield information on goodness-of-fit, model development and comparison, and confirmatory strategies. SPSS Amos 21 statistical software was used for data analysis and model development.Findings -The results suggest that procurement systems have indirect impact on TCs. The relationship between procurement system and TCs is fully mediated by costs of information, procurement, administration, and enforcement. Applying the developed models (the Traditional and Design-Build) to "real world" cases, it was found that TCs in the Traditional system amounts to 18.5 percent of the annual salary cost of a project manager (as an indicator quantum), while in the Design-Build system, it amounts to 14.5 percent of the annual salary cost of a project manager. TCs were calculated using regression equations based on factor loadings in the Traditional and Design-Build models. Practical implications -This study applies new theoretical model for the link between procurement system and TCs, investigating and empirically demonstrating the influence of procurement system on TCs in construction. It also offers a new plausible explanation for the factors influencing TCs in procurement. The study emphasizes "in-house" TCs from the perspective of the professionals. The findings have practical implications on construction business practice due to their robust empirical nature and theoretical framework, whi...

show abstract

“…And the platform effect has not been transcended by other combustion catalysts so far. [6][7][8][9][10][11][12] Researchers have proved that carbon material can significantly enhance the catalytic effect of lead salt when it used mixed with lead.…”

Section: -5mentioning

confidence: 99%

Preparation and Thermal Performance of Fullerene-Based Lead Salt

Guan¹,

Peng²,

Jin³

et al. 2014

Bulletin of the Korean Chemical Society

View full text Add to dashboard Cite

C60 is widely investigated because of its unique structure. But its applications in solid propellant seem to be relatively neglected. C60 has more outstanding features than carbon black which is widely used as a catalyst ingredient of solid propellant. To combine the advantages of fullerene and lead salts, another good composite in propellant catalysts, we synthesized a kind of fullerene phenylalanine lead salt (FPL) and explored its thermal performances by differential thermal analysis (DTA) and thermogravimetry analysis (TGA). The results show it undergoes four exothermic processes started from 408 K. Combined TGA and X-ray diffractometer (XRD), the decomposition mechanism of FPL was derived by TG-IR and comparing IR spectra of FPL and its residues after burned to 327°C, 376°C and 424°C, respectively. Effect of FPL on the decomposition characteristic of hexogen (RDX), a type of explosive in propellant, has been investigated using DTA at different heating rate, which shows the decomposition temperatures of the explosive are all reduced by more than 20 K. The corresponding activation energy (Ea) is decreased by 30 kJ·mol −1. So FPL has potential application as a combustion catalyst in solid propellant.

show abstract

Factors That Affect Transaction Costs in Construction Projects

Cited by 90 publications

References 45 publications

Transaction costs incurred by construction owners

Transaction costs incurred by construction owners

Estimating transaction costs in the New Zealand construction procurement

Preparation and Thermal Performance of Fullerene-Based Lead Salt

Contact Info

Product

Resources

About