Search results

Building information modeling (BIM) is vital in the performance improvement of contracting firms. Thus, there is a need to stimulate its implementation in the construction sector with a view to meeting the competitive demands of the industry. However, there have been very few studies on BIM implementation among contracting firms in Nigeria. Hence, this study aims to examine the current BIM uptake among Nigerian contracting firms, assess the barriers to BIM implementation and examine the ways of improving BIM implementation within these contracting firms.

A questionnaire survey was conducted on contracting firms (comprising small-, medium- and large-sized firms) in Lagos, Nigeria. The obtained data were analyzed using both descriptive and inferential statistics. These included percentage, mean score, standard deviation, the Kruskal–Wallis test and factor analysis.

This study revealed the current state of BIM implementation among contracting firms in Nigeria in terms of their knowledge of BIM, their usage of BIM as well as the BIM software adopted. Furthermore, the study identified 25 barriers to BIM implementation in contracting firms and identified 15 ways to improve BIM implementation in contracting firms. The relative importance of both the identified barriers and the ways for improving BIM implementation was gauged among contracting firms comprising small-, medium- and large-sized firms. The result of the Kruskal–Wallis test revealed that, except for two (out of 25) identified barriers, and one (out of 15) identified ways of improving BIM implementation in contracting firms, there is no significant statistical difference in the perceptions of the three respondents’ groups. The result of the factor analysis categorized the identified 25 barriers into seven main factors.

This study provides empirical evidence on the barriers to BIM implementation and the ways of improving its implementation among contracting firms, thereby providing a better insight of the Nigerian construction industry’s BIM environment.

This study’s findings can positively inform the decisions of construction stakeholders to formulate strategies capable of improving BIM implementation in the construction industry at large.

New business models, such as life‐cycle contracting, challenge the narrow and static understanding of contracts with hard and precise terms. The aim of this paper is to examine how flexibility could be incorporated into contracting processes.

The data of the paper have been gathered applying the triangular method; first, by interviewing key personnel participating in contracting at eight Finnish firms; second, examining contract and other documents of those companies; and third, studying earlier research on contracting practices. Theoretically, the paper is based on relational contract and proactive approaches to law on the one hand and on organizational studies based on new institutional economics on the other.

Flexibility is often introduced to contracts with relational methods, relying on good personal relationships between business partners or negotiation power and negotiation skills. Contract documents often do not contain mechanisms for dealing with contingencies, or “soft” contract terms. The paper finds the following reasons that may explain this. First, firms heavily rely on model contracts to develop their own templates and the lack of contract models in new business areas hinders firms to develop their templates. Second, unfamiliarity with using soft elements makes it difficult to use them. Additionally, in some cases firms may prefer using relational capability.

The findings need verification from further multidisciplinary empirical research.

The findings support firms in developing their contracting capabilities to meet the requirements of the changing business environment and gain competitive advantage from well‐organized contracting.

This paper is one of the first empirical studies comprising also the legal approach.

When corporate governance is effective, new managerial contracts should maximize shareholder wealth. The Omnibus Budget Reconciliation Act (OBRA) of 1993 provides a natural environment to examine the effectiveness of corporate governance. We find that firms affected by OBRAs $1 million cap on non-performance-based compensation experience abnormally high returns around the board meeting and proxy dates when contracts are voted on. These findings are consistent with effective corporate governance and efficient contracting and contrary to expropriation theory. Firms not affected by OBRA do not have a positive stock price reaction to new contracts and increase both cash and bonus compensation.

There exists a tremendous number of studies in strategy and management journals concerning contracting issues between private firms. Those studies are usually grounded in competing theoretical frameworks such as transaction cost economics, the resource-based view of the firm, incentive and agency theories and few others. However, very few studies, especially in those reviews (this is also true to a lesser extent in economic journals), are concerned with the issue of contracting between private firm and government. This is particularly surprising since existing theoretical frameworks qualified to tackle contracting strategies between private firms can also provide insights into issues related to contracting with government.

Contracting practice and theory is based upon a legal framework which impedes the attainment of value, defined as quality and cost containment. The manufacture of complex, highly technical infrastructure is especially impeded. Constraints of the legal framework are being overcome through innovative infrastructure contracting practices which maintain competitiveness and accountability, and simultaneously foster collaboration among the participants. Some of these innovations are discussed along with five projects which utilized one or more of them. A management framework for contracting based on a competitive/collaborative model is offered which emphasizes value, cooperation, long-term relationships, accountability and stewardship.

The purpose of this paper is to examine how a firm’s investment behavior relates to its subsequent bank loan contracting.

Using a sample of US firms during the period 1992-2011, the authors examine the association between overinvestment (underinvestment) and three characteristics of bank loan contracts: loan spread, collateral requirement, and loan maturity.

The authors find that overinvesting firms obtain loans with higher loan spreads. Additional tests show that the effect of overinvestment on loan spreads is generally more pronounced in firms with lower reputation, weaker shareholder rights, and lower institutional ownership. The effect of overinvestment on collateral requirement is mixed, and investment efficiency has no significant relation to loan maturity.

The results are subject to the following caveats. First, while the study provides empirical evidence that investment efficiency affects bank loan contracting terms, especially the cost of bank loans, the underlying theory is not well-developed. The authors leave it up to future research to provide a theoretical framework to clearly distinguish the cash flow and credit risk effects of past investment behavior from those of existing agency conflicts. Second, due to data limitation, the sample size is small, especially when the authors control for corporate governance measured by G-index and institutional ownership.

The finding that overinvestment is costly to corporations suggests that managers should consider the potential trade-offs from such investment decisions carefully. The evidence also alerts shareholders and board members to the importance of monitoring management investment decisions. In addition, the authors find that corporate governance moderates the relationship between investment decisions and cost of bank loans, suggesting that it would be beneficial to design effective governance mechanisms to prevent management from empire building and motivate managers to pursue efficient investment strategies.

First, the findings enhance understanding of the potential economic consequences of overinvestment decisions in the context of a firm’s private debt contracting. The evidence suggests that lenders perceive higher credit risk from overinvestment than from underinvestment, likely because firms squander cash in the current period by investing in (negative net present value) projects that are likely to result in future cash flow problems. Second, the study contributes to the literature on the determinants of bank loans by identifying an observable empirical proxy for uncertainty in future cash flows that increases credit risk.

An important question is whether lenders perceive politically connected firms as having less or higher default risk, and thus provide them with more or less preferential loan terms compared with non-connected firms. This paper aims to examine the relationship between political connections of corporate board members and cost of debt and loan contracting in the Gulf Cooperation Council (GCC) countries.

The initial sample comprises 288 GCC firm-year observations from 227 publicly listed firms in Oman, Qatar, Saudi Arabia and United Arab Emirates for the period from 2011 to 2015. It includes all the GCC publicly listed firms, excluding those in the financial, insurance and banking sectors because these entities are subject to different regulations. The ordinary least squares, logit regression and other sensitivity tests have been used to analyse the data and enhance reliability of the results.

This study finds that politically connected firms, particularly those connected through ruling royal family members, are associated with lower cost of debt, greater amounts of loans and longer-term government loans. Therefore, these findings support the prediction that political connections benefit GCC firms in the form of access to favourable terms from both government and commercial banks.

This study contributes to the extant literature by providing insightful analysis using unique political features of the GCC, integrated with agency and resource dependency theories. In particular, this study fills the gap in understanding the nature of loan contracting offered by government and commercial banks in the presence of politically connected boards within GCC setting.

This paper seeks to examine the link between the academic debates on obligation contracting and its successful implementation as a mode of governance. The literature reports that firms are increasingly entering into long‐term, high dependency exchanges as a result of: increased demand for quality goods, demand for variability of goods, demand for constant innovation, severe price competition and increasing technology costs. These changes are forcing firms to enter into complex relationships with other firms in order to remain competitive. Examples of such relationships are: relational contracting, network organisations, strategic alliances and horizontal co‐operation. The increase in number and complexity of these exchanges in an environment characterised by uncertainty has led to the increased interest in the use of obligation contracting. Furthermore, this interest has been reinforced by the changing nature of products being exchanged. More knowledge‐based products and information‐based modes of production necessitate the sharing of strategically sensitive data. Hence the rise of importance of obligation contracting is not only due to the increased number of complex exchanges in uncertain environments, but also the very nature of the goods being exchanged.

This study aims to explore the innovation deployment of construction contracting firms through exploratory–exploitative learning and organisational ambidexterity.

Firstly, a literature-based conceptual framework was developed to explain innovation implementation through exploratory–exploitative learning and organisational ambidexterity. A prominent Hong Kong construction contracting firm was then selected as the case study to explore its innovation deployment at different organisational levels (i.e. firm and project levels). Qualitative data were attained by conducting 12 semi-structured interviews with industry experts and document analysis. The thematic analysis using NVivo 12 software was adopted to analyse data.

Findings reveal that the case study firm successfully fosters innovation when ambidexterity is achieved through the balance between exploratory (i.e. radical innovation) and exploitative learnings (i.e. incremental innovation).

Establishing uniform ambidexterity (i.e. 50:50) at the firm or project level is not mandatory to deploy innovation successfully. The ratio can vary based on the characteristics and requirements of construction firms.

This paper shall motivate construction practitioners to adopt radical–incremental innovation ambidexterity in firms and ultimately enhance the productivity and efficiency of the construction industry.

Previous construction innovation research has frequently explored firm or project-level innovation separately. This study identified a multi-level focus on innovation. Through the lens of exploratory–exploitative theory, different forms of innovation ambidexterity for different levels are suggested rather than one specific ambidexterity.

The goal of interfirm contract research is to examine how formal contracts impact transaction success, firm relationships, and ultimately individual and collaborative firm performance when two or more firms interact. Most contract literature uses an economic lens to examine contracts: the property rights perspective, agency theory, and TCE. Property rights-based contract research (Coase, 1960; Demsetz, 1967; Alchian & Demsetz, 1973; Cheung, 1969) examines how efficient property rights assignment mitigates ex ante hazards. Similarly, agency theory-based contract research (e.g., Ross, 1973; Jensen & Meckling, 1976; Harris & Raviv, 1979) investigates how incentive alignment between the principal and agent leads to the mitigation of ex ante hazards. In contrast, TCE-based research (Williamson, 1975, 1985) examines contractual safeguards to mitigate both ex ante and ex post hazards (e.g., Joskow, 1985, 1987, 1990; Crocker & Reynolds, 1993). Because the three economic perspectives dominate, most research addresses how contracts are used to mitigate ex ante or ex post hazards. Therefore, many topics still need to be investigated to enhance our understanding of interfirm contracting.