Lowe, J G (1997) Insolvency in the UK construction industry. Journal of Financial Management of Property and Construction, 2(1), pp. 83-112. ISSN 1366-4387
Abstract
This paper is an analytical and empirical study of insolvency in the UK construction industry. This is of interest because of the apparently disproportionate share of insolvency affecting UK construction. A number of hypotheses are generated and tested. The principle findings of the study are that cash flow factors appear to be largely responsible for the level of insolvency in construction insolvency. Notable variables appear to be borrowing by construction firms, availability of credit and domino effects from general insolvency. Also, while profitability appears to have a measurable impact on insolvency, it is less important than cash flow factors. Fluctuations in construction output and the cost of credit appear to have no significant impact on insolvency. A robust predictive regression model of construction insolvency is generated using quarterly empirical data for construction insolvency in England and Wales over the period 1969 to 1994 against a variety of independent variables.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | insolvency, company liquidations, construction, cash flow, working capital |
| Index terms: | liquidation, Wales, construction output, construction firm, construction insolvency, cash flow, insolvency, construction industry, empirical study, profitability, independent variable, regression model, England |
| Subjects: | financial analysis, liability law, research methods, Geography, operations management, economic analysis, organization, industry analysis, statistical analysis, financial management, risk assessment |
| Topics: | Cost Management, Business Strategy, Research Practice, Legal Issues, Project Management, Geographical Context, Risk Management |
| Descriptive scope: | 4 PCTA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here