The Construction Industry and (Dis)Economies of Scope: Empirical Research in the Hokkaido Procurement Auction

Arai, Koki; Morimoto, Emi

doi:10.1007/s10842-018-0285-4

Cited by 5 publications

(2 citation statements)

References 13 publications

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“…The use of this objective data is the same as in the following previous studies. Drew and Skitmore (1997), Chen (2008), Oo et al (2010) and Arai and Morimoto (2019), all use this type of bid data in their research. Mochtar and Arditi (2001) examine several issues related to pricing in construction and explain that the three internal pricing variables with the largest statistically significant contingency coefficients for pricing strategy are "marketing intelligence capabilities", "annual contract value" and "the type of client in most projects".…”

Section: Hypothesis Based On General Thinkingmentioning

confidence: 99%

Geographic market size and low bid competitiveness in construction companies

Arai

2021

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Purpose The purpose of this study is to determine the relationship between the geographic market size of businesses and the competitiveness of being able to bid at low prices. Design/methodology/approach The design of this study is based on a natural experiment approach. Firstly, after controlling for the firm size and other factors, the author sees that firms participating in bidding in a large region are more competitive to bid at lower prices than firms doing business in a smaller region. The author then tests for causality in a natural experiment of the exogenous event. Findings The results show that firms participating in the bidding process in a large area are more competitive to bid at lower prices than firms doing business in a small area. This is tested in a natural experiment, and the result is that they are more competitive because they do business in a larger area. Practical implications The practical implication is that, when aiming for competitiveness, it is most important to consider the nature of the business and to see the essence of the business, for example, that networks are important in the construction industry, and that doing business over a wide area is the way to become competitive. Social implications The social implications are that to make firms more competitive, we must look at the characteristics of the industry and come up with policies that fit the reality, such as encouraging them to do business in a wide area. Originality/value The originality of this study is that this study viewed competitiveness as being able to bid low prices for public procurement and found that doing business in a wide area is competitive. Furthermore, the causal effect of the study was to test the fact that doing business in a wide area does not mean doing business in a wide area because it is competitive, but that doing business in a wide area creates a competitive advantage.

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Section: Hypothesis Based On General Thinkingmentioning

confidence: 99%

Geographic market size and low bid competitiveness in construction companies

Arai

2021

Self Cite

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“…It has also been revealed that firms with experience in using eRA in bidding construction works bid less aggressively (Campo 2012). From another point of view, bid rates of diversified and specialized firms have been analyzed (Arai and Morimoto 2019). It has been revealed that bid rates of diversified firms are higher, thus, the probability to win a contract decreases with an increasing number of operational segments.…”

Section: Construction Industry Related Auction Issuesmentioning

confidence: 99%

Challenges of Electronic Reverse Auctions in Construction Industry—A Review

2020

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The innovation of construction procurement by means of electronic reverse auctions is a controversial subject of discussion among both researchers and practitioners. This paper consolidates and critically discusses current knowledge concerning the adoption and use of electronic reverse auctions in the light of specific features of the construction industry. A systematic literature review has been employed to select papers indexed in Scopus and Web of Science databases. The findings of the study indicate that studies are addressing especially five main areas, i.e., suitability of electronic reverse auction (eRA) for construction tenders, related drivers and barriers, ethical considerations, savings potential and bidding behavior, and bid distribution. Accordingly, the authors are suggesting three directions in which future research should focus on mutual interaction of electronic reverse auctions and long-term effects on construction project outcomes. Author Contributions: Conceptualization, T.H., I.M., and N.J.; methodology, T.H., I.M., and N.J.; software, T.H., I.M., and N.J.; validation, T.H., I.M., and N.J.; formal analysis, T.H., I.M., and N.J.; investigation, T.H., I.M., and N.J.; resources, T.H., I.M., and N.J.; data curation, T.H., I.M., and N.J.; writing-original draft preparation, T.H., I.M., and N.J.; writing-review and editing, T.H., I.M., and N.J.; visualization, T.H., I.M., and N.J.; supervision, T.H., I.M., and N.J.; project administration, T.H., I.M., and N.J.; funding acquisition, T.H., I.M., and N.J. All authors have read and agreed to the published version of the manuscript.

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The Characteristics of Low Bid Price Survey Standards and Their Impact

Arai

2021

J Ind Compet Trade

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The Construction Industry and (Dis)Economies of Scope: Empirical Research in the Hokkaido Procurement Auction

Cited by 5 publications

References 13 publications

Geographic market size and low bid competitiveness in construction companies

Geographic market size and low bid competitiveness in construction companies

Challenges of Electronic Reverse Auctions in Construction Industry—A Review

The Characteristics of Low Bid Price Survey Standards and Their Impact

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