The Economics of the Modern Construction Firm

Cover......Page 1
Contents......Page 8
List of Figures......Page 14
List of Tables......Page 15
Preface......Page 16
List of Acronyms......Page 19
Introduction......Page 22
Part I Social Structures of Accumulation......Page 28
Social economics: an introduction......Page 30
General and sectoral structures: social structures of the economy and social structures of a branch of production......Page 32
The social structure of the economy and its overarching institutions......Page 33
International economic institutions and the UK economy......Page 34
National economic institutions of the UK economy: the post- war period and the current period......Page 35
Key elements in social structures of the economy; structure of this book......Page 43
Technical knowledge in construction......Page 44
Control in the labour process......Page 45
The social division of labour......Page 47
Introduction to concept of Social Structures of Provision: routines, conscious decision-making and expectations......Page 48
Relation of a structure of provision to a structure of production......Page 51
Concluding remarks......Page 53
Previous institutional approaches to the construction/development process......Page 54
Social systems of organisation of the development or construction process (social systems of provision of built environment)......Page 56
Two social systems of new housing provision: speculative and contracting......Page 60
The 'speculative' social structure of housing provision (SSHP)......Page 61
Lexicographic decision-making by owner-occupier purchasers and product market segmentation......Page 62
Economic speculators, land markets, land acquisition decisions and long-term expectations under uncertainty......Page 64
Housing markets, housing acquisition/disposal decisions and long-term expectations under uncertainty......Page 65
Intermediaries, speculators and information asymmetry in housing production markets......Page 66
Divergent expectations between classes of actor in SSHPs......Page 68
Role of firms as institutions in SSHPs......Page 69
Methodology of a systems approach......Page 71
An application of 'systems of provision' approach to metropolitan SSHPs: the case of London and South East England......Page 73
The neo-conservative or current period......Page 76
Power, authority and the firm in social systems of organisation of the construction process (SSOBPs)......Page 78
Market serving institutions in social systems of organisation of the construction process......Page 80
An agenda for future research into social systems of housing provision......Page 82
Concluding remarks......Page 83
The misleading average – the significance of different ways of looking at statistical data......Page 85
Economic polarisation: barriers to equalisation......Page 89
Polarisation and duality in the construction labour market......Page 93
Productivity differentials in construction......Page 96
The productivity gap and size of firm: conclusion......Page 100
Productivity of firms and type of work......Page 104
Market power and productivity......Page 106
Capitalist and petty capitalist organisation sectors: polarity of profitability, accumulation and competition......Page 107
Concluding remarks......Page 111
Part II Construction Markets......Page 114
Construction markets......Page 116
Market structure......Page 119
Concentration: seller concentration......Page 121
Concentration: buyer concentration......Page 123
Barriers to entry......Page 124
Measuring construction market shares and barriers to entry......Page 128
Price elasticity of demand......Page 132
Market segments......Page 137
Specialisation by construction firms......Page 138
Specialisation in housing production......Page 141
Concluding remarks......Page 142
Introduction......Page 143
Markets and hierarchies as means of co-ordination......Page 144
Transaction costs......Page 146
Transaction costs in construction......Page 149
An empirical approach to transaction costs in the construction industry......Page 150
A theoretical approach to transaction costs in the construction industry......Page 153
An alternative approach to the 'problem' of the large firm......Page 155
Unequal exchange......Page 158
Economies of scale and of integration......Page 159
Transaction costs and business strategy in construction......Page 163
Subcontracting in construction – causes and consequences......Page 164
Economics of joint ventures......Page 165
Economics of subcontracts......Page 166
Concluding remarks......Page 167
How markets operate in construction......Page 169
Neo-classical theory of markets......Page 171
Flexprice and fixprice markets......Page 175
A model of a market in construction contracts......Page 178
The conventional spectrum of neo-classical market types......Page 181
Theory of the kinked demand curve......Page 182
Theory of contestable markets......Page 184
The contract construction market......Page 185
From the market for a single construction project to the market for a type of project......Page 186
Mixprice in the market for construction contracts......Page 188
New housing market......Page 190
Property markets......Page 191
The interaction between fixprice and flexprice markets in construction......Page 193
Concluding remarks......Page 194
Part III Capacity......Page 196
Introduction......Page 198
The individual firm in construction......Page 199
Output and price determination for natural and produced goods......Page 200
Capacity at the level of an industry or sector......Page 202
The neo-classical versus the 'constant unit direct cost' model of supply response to demand......Page 204
Unit labour costs over the business cycle......Page 206
Measuring spare capacity in the construction industry......Page 208
Imports and construction industry capacity......Page 210
Capacity and international construction......Page 211
Towards 'single European markets' for construction and for building materials?......Page 212
Concluding remarks......Page 213
The shape of the construction firm's cost curve......Page 214
The neo-classical rising short-run marginal cost curve......Page 215
The mirror-L-shaped unit cost curve......Page 216
Staff and capacity......Page 217
A Penrosian idea of capacity applied to a construction firm......Page 220
Concluding remarks......Page 224
Part IV Pricing and Investment Strategies......Page 226
The determinants of price and long-run capacity of a firm under uncertainty......Page 228
The Eichner–Wood model......Page 229
The Eichner–Wood model applied to the construction firm......Page 236
Price and output determination for a production-contractor construction firm......Page 237
The pricing and output behaviour of a near-firm or micro-firm......Page 250
Concluding remarks......Page 253
Speculative builders......Page 254
Contractors......Page 263
Concluding remarks......Page 274
Part V Capital Circuits......Page 276
Organisational and accounting concepts of the firm......Page 278
Measuring the size of a firm......Page 281
Capital circuits and company accounts......Page 283
The industrial (productive) capital circuit......Page 286
The business and financing cash flows of an industrial firm......Page 289
Measures of the economic performance of an industrial firm: economic surplus, profit and net cash flow......Page 293
Performance in a context of growth: the expanding industrial firm......Page 294
Concluding remarks......Page 295
The merchant (commercial) capital circuit......Page 297
The banking (financial) capital circuit......Page 299
The landowning (property) capital circuit......Page 302
Difference of circuits and conflict between firms......Page 303
A complex unity of circuits: the modern construction corporation......Page 304
The forms of capital......Page 309
Concluding remarks......Page 316
Bibliography......Page 318
C......Page 327
F......Page 329
J......Page 330
M......Page 331
P......Page 332
S......Page 333
W......Page 334