Is blockchain cost-effective in construction project management? A systematic review from the perspective of transaction cost

Abstract

PurposeBlockchain technology (BCT) is considered a promising tool to improve the productivity of construction project management. Existing research has studied its potential costs and benefits for the construction industry. However, the potential costs and benefits of BCT failed to be compared as actual costs and benefits of specific applications for stakeholders. To fill this gap, this study seeks to analyze the cost-effectiveness of BCT-based applications in construction project management.Design/methodology/approachThis study is conducted with a customized systematic literature review based on transaction cost theory to enable qualitative comparison. With a deliberately designed structure confining extraneous variables, the costs and benefits of BCT-based applications are identified and compared. The inherent dependent relations of processes and the evolution relations of functions are identified. The cost-effectiveness of blockchain adoption is then analyzed.FindingsSeven functions and six challenges are identified within five processes. The result suggests all identified functions are cost-effective except for manual instruction (coding smart contracts manually). The smart contracts require explicit definition and logic to be effective. However, the construction projects essentially require the institution to be flexible due to unpredictability. The adoption of smart contracts and corresponding additional requirements can increase the transaction cost of bounded rationality.Research limitations/implicationsAs manual instruction is fundamental to realize other functions, and its advanced substitute relies on its broad adoption, its cost-effectiveness must be improved for applications to be acceptable to stakeholders. The establishment of a universal smart contract model and a universal, legitimate and efficient database structure are recommended to minimize the cost and maximize the effect of applications.Originality/valueThis study contributes to the knowledge by providing a comprehensive analysis of BCT adoption’s cost-effectiveness in construction project management. The adopted review structure can be extended to analyze the qualitative benefits and challenges of management automation in the early stages.