A Meta-frontier method of decomposing long-term construction productivity components and technological gaps at the firm level: evidence from Malaysia

Mohd Azrai Azman*, Carol K.H. Hon, Martin Skitmore, Boon Liat Lee, Bo Xia

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

7 Citations (Scopus)

Abstract

There is a need for a better approach to measure construction productivity rigorously, multilaterally, longitudinally and decomposed into its components. In response, this paper offers a robust approach to analysing construction productivity at the firm level that has been lacking in the industry to date, by measuring the Total Factor Productivity (TFP) of 37 public-listed Malaysian construction firms over 14 years (2003–2016), based on the Färe-Primont index. In comparing different groups of building, civil and specialist construction firms, this is the first application of a meta-frontier framework to capture the technological gaps involved. Based on the construction firms’ financial data, it is found that TFP improvement generally occurs due to Technical Efficiency (TE) and Scale-Mix Efficiency (SME) (largely scope economies), and significant technological gaps exist among different groups. Moreover, the industry suffered a decline in technologically related production environment over the period–prompting the conclusion that long-term policy engagement should focus on technological improvements. The paper provides a robust approach to analysing construction productivity at the firm level that also can be used for accessing productivity components and technological gaps in construction and other industries.

Original languageEnglish
Pages (from-to)72-88
Number of pages17
JournalConstruction Management and Economics
Volume37
Issue number2
DOIs
Publication statusPublished - 1 Feb 2019
Externally publishedYes

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