Yung, P. and Blacker, S. (2026) Macroeconomic determinants of individual construction trader bankruptcy in the UK. Construction Management and Economics, 44(9), pp. 653-673. ISSN 0144-6193
Abstract
The traditional theory on individual bankruptcy was based on consumption patterns of consumers. The limited empirical studies were not only inconclusive but also inapplicable to construction traders. The lack of studies on macroeconomic factors affecting construction insolvencies and the disparity between the trends of corporate and individual bankruptcies over the same period give rise to clear research gaps. This paper therefore aims to analyse macroeconomic factors affecting construction trader bankruptcy. An Autoregressive Distributed Lag (ARDL) model was developed to evaluate impacts of five macroeconomic factors on construction trader bankruptcies from Q3 1997 to Q1 2025 in the UK. Significant factors include construction output value, unemployment rate and number of traders. The structural break in the model from 2010 can be explained by the introduction of Debt Relief Orders and the quantitative easing policy, while another break after 2020 can be attributed to the government alleviation polices for pandemic. Overall, the model was found to be stable with high speed of adjustment.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | ARDL model; insolvency; macroeconomic; trader bankruptcy; UK construction |
| Index terms: | construction insolvency, empirical study, determinant, bankruptcy, pandemic, disparity, unemployment, insolvency, construction output, consumption |
| Subjects: | research methods, consumer economics, social justice, economic analysis, liability law, risk assessment, health risk and incident analysis, operations management |
| Topics: | Business Strategy, Stakeholder Management, Health and Safety, Ethics, Research Practice, Project Management, Risk Management, Legal Issues |
| Descriptive scope: | 3 PCA |
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