Modelling contractors' mark-up behaviour in different construction markets

摘要

Purpose - In order to compete successfully, international contractors need to have an understandingrnnot only of the make-up of the different competitive environments within each country, but also ofrncontractors' competitive behaviour within those environments. Contractors' mark-up decision makingrnin public sector contracting is directly compared in two construction markets - Hong Kong andrnSingapore.rnDesign/methodology/approach - Regression analysis is used to compare the lowest percentagernmark-up in both markets against four mark-up decision factors that fall into two groups -rnmarket-environment factors (i.e. number of bidders, market conditions) and project-specific factors (i.e.rntype and size of project). Data were gathered using a designed bidding experiment.rnFindings - In line with de Neufville et al.'s "good year-bad year" study, the effect of marketrnconditions was found to be independent of the number of bidders in both markets; contractors'rnmark-up decreases as the number of bidders increases, with lower mark-up in recession. In addition,rnthis study provides evidence that contractors' mark-up behaviour varies in different markets: HongrnKong contractors' mark-up behaviour is more straightforward, in that only the market-environmentrnfactors are significant. However, Singapore contractors' mark-up behaviour is affected by project typernin addition to the market-environment factors. Project size was not found to be significant in eitherrnmarket.rnOriginality/value - The empirical findings provide a valuable insight into contractors' mark-uprnbehaviour, especially those contractors intending to bid for jobs in these two internationally renownedrnconstruction markets.