Determinants of efficient risk allocation in privately financed public infrastructure projects in Australia

Jin, Xiao-Hua 2010, Determinants of efficient risk allocation in privately financed public infrastructure projects in Australia, Journal of construction engineering and management, vol. 136, no. 2, pp. 138-150, doi: 10.1061/(ASCE)CO.1943-7862.0000118.

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Title Determinants of efficient risk allocation in privately financed public infrastructure projects in Australia
Author(s) Jin, Xiao-Hua
Journal name Journal of construction engineering and management
Volume number 136
Issue number 2
Start page 138
End page 150
Publisher American Society of Civil Engineers
Place of publication New York, N.Y.
Publication date 2010-02
ISSN 0733-9364
Keyword(s) risk allocation
organizational capability
transaction cost economics
multiple linear regression
public-private partnership.
Summary Risk allocation in privately financed public infrastructure projects, which are mainly referred to as public-private partnership (PPP) projects, is a challenging job due to the nature of incomplete contracting. An investigation into the mechanism that guides the formation of efficient risk allocation strategies is thus desirable. Drawing on the transaction cost economics and resource-based view of organizational capability, this paper has identified five main features of the transactions associated with risk allocation in PPP projects. They include partners’ risk management routine, partners’ risk management mechanism, partners’ cooperation history, risk management environmental uncertainty, and partners’ risk management commitment. For achieving cost efficiency, different risk allocation strategies may suit different conditions of the features. Accordingly, a theoretical framework and five hypotheses were proposed for testing. Data collected in an industrywide survey were analyzed using multiple linear regression technique. It was found that generally, the identified features are determinants in the decision-making process of efficient risk allocation. Therefore, the proposed theoretical framework provides both government and private agencies with not only a logical and holistic understanding of but also a support tool for decision making on risk allocation strategy in PPP projects. Study limitations and future research directions are also set out.
Language eng
DOI 10.1061/(ASCE)CO.1943-7862.0000118
Field of Research 120201 Building Construction Management and Project Planning
Socio Economic Objective 910402 Management
HERDC Research category C1 Refereed article in a scholarly journal
HERDC collection year 2009
Copyright notice ©2010, ASCE
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