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Title
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Transaction cost analysis of public infrastructure delivery
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Author
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Abstract
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| Purpose The purpose of this paper is to offer a systematic assessment of the magnitude of transaction costs of public infrastructure delivery, based on the three attributes of transaction costs, being the asset specificity, uncertainty and frequency of a transaction. Design/methodology/approach Non-parametric tests were used to test the transaction cost differences between different procurement types. Findings The authors find empirical support, based on a sample of 172 public infrastructure projects in Belgium, that construction firms make higher relation specific investments to their transaction partners under a public-private partnership (PPP) than a under a traditional public procurement (TPP). In addition, the authors found that PPP transactions are burdened by a greater uncertainty and a less mature market than TPP transactions. Research limitations/implications Given the complexity of this research, the scope is limited to: a strict distinction between two procurement types, one geographical area, a limited time scope and a focus on the private sector. Hence, the authors suggest that further research broadens the scope of either one of these aspects in order to get a better understanding of the total transaction cost burden of the public infrastructure market. Practical implications This study offers policy makers form a better understanding of the transaction cost implications when evaluating different procurement types. Originality/value This paper serves as one of the first systematic comparative analyses of the magnitude and determinants of transaction costs for the delivery of public infrastructure. |
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Language
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English
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Source (journal)
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International Journal of Managing Projects in Business
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Publication
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2015
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ISSN
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1753-8378
1753-8386
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DOI
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10.1108/IJMPB-10-2014-0075
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Volume/pages
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8
:3
(2015)
, p. 441-456
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Full text (Publisher's DOI)
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