Principal Component Analysis of Factors Affecting Construction Project Transaction Costs in Developing Economies
Authors: Matthew Ikuabe, Clinton Aigbavboa, Ayodeji Oke
Abstract: The delivery of any construction project is the outcome of economic exchange, usually involving multiple actors. This economic exchange is attributed to costs other than the traditional cost elements of project delivery and is referred to as transaction costs. Optimizing construction transaction costs is a vital constituent in the deliberations of project success, especially from the project client’s perspective. On this basis, this study evaluates the factors affecting construction project transaction costs in the Nigerian construction industry. A questionnaire survey was used in collecting data from the target respondents, while the retrieved data was analyzed with exploratory factor analysis. Findings showed that four constructs critically influence transaction cost in construction project delivery: the client’s behavioral traits, project characteristics, managerial skills, and contractor's behavioral traits. The study’s findings make theoretical contributions to the literature on improving construction project delivery by unraveling the influential factors to transaction costs.
Keywords: Construction project, Transaction costs, Developing economy, Economic exchange
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