The Significance of Barriers to Entry in the Construction Industry
This research looks at the significance of barriers that firms considering entry into the construction industry might face. Drawing on the microeconomic characteristics of imperfectly competitive and oligopolistic markets the analysis finds that there are a dozen barriers to entry that affect the industry, but their significance depends on the product type. The discussion covers the question of product homogeneity in construction and evidence for the existence of barriers to entry in concentration levels. Barriers to entry specific to construction are then identified, which leads to an analysis of how they operate and their significance (high, medium or low) in different market types, thus increasing our understanding of construction industry dynamics.
ACA, 1996, 1998, 2001. Annual Reports, Australian Contractors Association, Sydney.
Bain, J.S. 1956. Barriers to New Competition, Harvard Mass., Harvard University Press.
Bain, J.S. 1959. Industrial Organisation, Wiley, New York.
Briscoe, G. 1988. The Economics of the Construction Industry, Mitchell, London.
Chamberlin, E.H. 1933. The Theory of Monopolistic Competition: a Reorientation of the Theory of Value, Harvard Mass., Harvard University Press.
Carlton, D.W. 2004. Why barriers to entry are barriers to understanding", American Economic Review, 94: 466-70."
Chiang, Y.H., Tang, B.S. and Leung, W.Y. 2001. Market Structure of the Construction Industry in Hong Kong", Construction Management and Economics, 19: 675-87."
de Valence, G. 2003. Market Structure, Barriers to Entry and Competition in Construction Markets, CIB W55/W65/W107 Conference, pp. 819-28.
Dixit, A. and Stiglitz, J. 1977. ''Monopolistic Competition and Optimum Product Diversity', American Economic Review, Vol. 67, pp. 297-308.
Ezulike, E., Perry, J. and Hawwash, K. (1997). The Barriers to Entry into the PFI Market", Engineering, Construction and Architectural Management, 4/3, 179-193, Blackwell Science Ltd."
Fleming, M. 1993. 'Construction', in Johnson, P. (Ed.) European Industries: Structure, Conduct and Performance, Aldershot, Edward Elgar, pp. 178-203.
Geroski, P., Gilbert R.J. and Jacquemin.A, 1990. Barriers to Entry and Strategic Competition, New York, Harwood Academic, reprinted London, Routledge, 2001.
Gruneberg, S.L. and Ive, G.J. 2000. The Economics of the Modern Construction Firm, London, Macmillan.
HIA-Reed Construction Data, 2005. Construction 100: Australia's 100 largest commercial contractors, Sydney.
Hillebrandt, P. 2000. Economic Theory in the Construction Industry, Third Edition, Basingstoke, MacMillan.
Ive, G.J. and Gruneberg, S.L. 2000. The Economics of the Modern Construction Sector, London, Macmillan.
Mason, E.S. 1939. Price and Production Policies of Large-Scale Enterprise", American Economic Review, 29: 61-74."
McAfee, R.P., Mialon, H.M. and Williams, M.A. 2004. What is a barrier to entry" American Economic Review, 94: 461-65."
McCloughan, P. 2004. Construction Sector Concentration: Evidence from Britain", Construction Management and Economics, 22: 979-90."
Modigliani, F. 1958. 'New Developments on the Oligopoly Front', Journal of Political Economy, 66: 215-32.
Robinson, J. 1933. The Economics of Imperfect Competition, London, Macmillan. Runeson, G. 2000. Building Economics, Deakin, Deakin University Press.
Scherer, F.M. and Ross, D. 1990. Industrial Market Structure and Economic Performance, Third Edition, Boston, Houghton Mifflin.
Shutt, R.C. 1995. Economics for the Construction Industry, Third Edition, Longman Scientific & Technical, Harlow.
Shepherd, W.G. and Shepherd, J.M. 2004. The Economics of Industrial Organization, Fifth Edition, Long Grove Ill., Waveland Press.
Stigler, G. 1986. The Organization of Industry, Chicago, University of Chicago Press.
Sylos-Labini, P. 1987 'Oligopoly', in Eatwell, J., Milgate, M. and Newman, P. (eds.) The New Palgrave: A Dictionary of Economics, New York, The Stockton Press, Vol. III: 701-05.
Yoon, J.H. and Kang, B-G. 2003. The Drivers for Change in the Korean Construction Industry" in Bosch, G. and Philips, P. Building Chaos: An international comparison of deregulation in the construction industry, London, Routledge, pp. 210-33."
Woodall, B. 1996. Japan under Construction: Corruption, politics, and public works, Berkeley, University of California Press.
Metrics powered by PLOS ALM