Determinants of Efficiency of Contractors in Hong Kong and China: Panel Data Model Analysis
Publication: Journal of Construction Engineering and Management
Volume 139, Issue 9
Abstract
This study investigates how firm attributes affect construction contractors’ efficiency in Hong Kong and Mainland China, from the period 2004 to 2010. This study finds that the efficiency of Hong Kong contractors is associated with their managerial capability to control business costs and financial capability to manage both short-term and long-term capital liquidity. The efficiency of Mainland China contractors is also associated with their managerial capability to control business and administrative costs but not with their financial capability to maintain capital liquidity. Theoretically, this study shows that managerial and technological abilities are two common factors that transcend different institutions and systems. Hong Kong is the freest economy in the world, whereas the economy of Mainland China is more regulated. Methodologically, data envelopment analysis is adopted to establish the efficiency scores of contractors to be analyzed by panel data regression, which controls individual contractor’s return to scale. Few construction competitiveness studies have attempted this methodological process, which can be replicated for future research in other countries, at different stages of their economic development, to ensure equally useful measures for cross-country comparison and to promote the sustainable developments of their construction industries.
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Acknowledgments
The authors thank the editor and reviewers for their comments and suggestions. This study is funded by the Research Grants Council of Hong Kong (Project Reference Number: B-Q17T).
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Published In
Journal of Construction Engineering and Management
Volume 139 • Issue 9 • September 2013
Pages: 1211 - 1223
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© 2013 American Society of Civil Engineers.
History
Received: May 29, 2012
Accepted: Feb 12, 2013
Published online: Feb 14, 2013
Discussion open until: Jul 14, 2013
Published in print: Sep 1, 2013
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