Nexus between contracting and construction professional service businesses: empirical evidence from international market

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Lu, W., Ye, K., Flanagan, R. and Jewell, C. (2014) Nexus between contracting and construction professional service businesses: empirical evidence from international market. Journal of Construction Management and Engineering, 140 (2). 04013049. ISSN 1943-7862 doi: 10.1061/(ASCE)CO.1943-7862.0000802

Abstract/Summary

he construction market around the world has witnessed the growing eminence of construction professional services (CPSs), such as urban planning, architecture, engineering, and consultancy, while the traditional contracting sector remains strong. Nowadays, it is not uncommon to see a design firm taking over the work of a traditional main contractor, or vice versa, of overseeing the delivery of a project. Although the two sectors of contracting and CPS share the same purpose of materializing the built environment, they are as different as they are interrelated. Much has been mentioned about the nexus between the two but little has been done to articulate it using empirical evidence. This study examined the nexus between contracting and CPS businesses by offering and testing lead-lag effects between the two sectors in the international market. A longitudinal panel data composed of 23 top international contractors and CPS firms was adopted. Surprisingly, results of the panel data analyses show that CPS business does not have a significant positive causal effect on contracting as a downstream business, and vice versa. CPS and contracting subsidiaries, although within the same company, do not necessarily form a consortium to undertake the same project; rather, they often collaborate with other CPS or contracting counterparts to undertake projects. This paper provides valuable insights into the sophisticated nexus between contracting and CPS in the international construction market. It will support business executives’ rational decision making for selecting proper contracting or CPS allies, or a proper mergers and acquisitions strategy in the international market. The paper also provides a fresh perspective through which researchers can better investigate the diversification strategies adopted by international contracting and CPS firms.

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Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/36193
Identification Number/DOI	10.1061/(ASCE)CO.1943-7862.0000802
Refereed	Yes
Divisions	Science > School of the Built Environment > Organisation, People and Technology group
Publisher	American Society of Civil Engineers
Download/View statistics	View download statistics for this item

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Date Deposited:	11 Mar 2014 08:38	Date item deposited into CentAUR
Last Modified:	09 Feb 2025 01:39	Date item last modified

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