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A comparative study of construction industry size and structure between the UK and Australia and the significance of industry fragmentation

journal contribution
posted on 2006-01-01, 00:00 authored by Craig Langston, M Wu
While comparing both the size and structure between the UK and Australian construction industries, this study reveals that the UK construction industry is about two and a half times larger than the Australian construction industry, and both industries are dominated by the proportion of small firms. The issue of fragmentation is characteristic of the construction industries in these two countries, and beyond. This study then develops a self recruiting-subletting cost indifference point model to explain why fragmentation occurs. Although the high proportion of small firms in the construction industry has been criticised as it prevents the exploitation of economies of scale, the self recruiting-subletting cost indifference point model theoretically proposes that subletting is usually profitable for construction firms. Thus the size distribution of the construction industry has a propensity to skew towards small firms.

History

Journal

International journal of construction management.

Volume

6

Issue

1

Pagination

45 - 61

Publisher

Chinese Institute of Construction Management

Location

Hong Kong

ISSN

1562-3599

Language

eng

Publication classification

C1 Refereed article in a scholarly journal

Copyright notice

2006, Chinese Research Institute of Construction Management

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