Dzeng, R J and Wu, J S (2013) Efficiency measurement of the construction industry in Taiwan: A stochastic frontier cost function approach. Construction Management and Economics, 31(4), pp. 335-344. ISSN 1466433X
Abstract
Construction firms require a large cash flow, thereby creating a significant financial leverage. Therefore, identifying a highly effective cost efficiency model is essential for construction firms, especially under the pressure of competition in today's global market. This research used stochastic frontier analysis (SFA) to model and measure the cost efficiency of construction firms in Taiwan, and to investigate the relationships between input resources and cost efficiency. The main findings include: (1) subcontracting reduces labour capacity; (2) larger firms can be more cost efficient; (3) appropriate financial leverage increases cost efficiency and capital; and (4) reducing equipment costs increases cost efficiency. These findings can help construction firms to strategically adjust the management of their firm and improve cost efficiency.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | construction cost; efficiency; measurement; stochastic frontier; Taiwan |
| Index terms: | construction industry, subcontracting, construction cost, efficiency, cost efficiency, competition, construction firm, Taiwan, equipment cost, cash flow |
| Subjects: | industry analysis, market analysis, Geography, financial management, economics, performance management, financial and cost management, organization |
| Topics: | Supply Chain Management, Quality Management, Geographical Context, Research Practice, Business Strategy, Cost Management |
| Descriptive scope: | 3 PCT |
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