Jolly Cyril, E (2026) Mediating effect of innovation on the relationship between project financing and construction cost efficiency: Innovation integrated cost efficiency perspective. Journal of Construction Engineering and Management, 152(1): 04025226, ISSN 0733-9364
Abstract
Empirical evidence from 283 construction industry professionals indicated that project finance greatly improves cost efficiency, and the effect is partly mediated by innovation. The decline in direct impact when introducing innovation verified the partial mediation, proving the proposed innovation-integrated cost efficiency (IICE) model correct. The model emphasizes digitalization, automation, and lean construction in minimizing costs. Structural equation modeling (SEM) established a sound model fit, and robustness tests like multigroup analysis (MGA) revealed that the mediation effect is conditional on firm size, project complexity, and digital maturity. The research indicates that companies with good financial planning and high innovation adoption experience better cost efficiency. Through the convergence of artificial intelligence (AI)-based forecasting, building information modeling (BIM), and other intelligent technologies, construction companies can improve performance and profitability. This research provides a theoretical contribution in presenting the IICE theory and a practical contribution through providing actionable insights for financial and technological planning harmonization. It highlights the strategic importance of innovation in cost containment and provides a framework for the sustainable management of construction costs.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | automation; construction cost efficiency; digital transformation; innovation; innovation integrated cost efficiency (iice) theory; mediation analysis; productivity; project cost optimization |
| Index terms: | productivity, construction cost, sustainable management, transformation, efficiency, building information modelling, innovation adoption, forecasting, construction industry, automation, artificial intelligence, profitability, structural equation modelling, construction company, project cost, lean construction, financial planning, mediation, digitalization, cost efficiency, financing, project finance, project complexity, evidence |
| Subjects: | artificial intelligence, financial and cost management, prediction and forecasting, business, dispute resolution, industry analysis, information systems, statistical analysis, management, financial management, performance management, economics, digital technology, economic analysis, evaluation and assessment methods, organization, innovation studies, building construction, automation and robotics, health safety and environment, organizational theory |
| Topics: | Quality Management, Legal Issues, Project Management, Health and Safety, Digital Applications, Site Management, Research Practice, Business Strategy, Cost 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