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Adafin, J, Rotimi, J O B and Wilkinson, S (2015) Why do the design stage elemental cost plan and final tender sum differ in New Zealand?. Journal of Financial Management of Property and Construction, 20(02), 116-31.

Carmichael, D G and Karantonis, J P (2015) Construction contracts with conversion capability: a way forward. Journal of Financial Management of Property and Construction, 20(02), 132-46.

Enshassi, A, El-Rayyes, Y and Alkilani, S (2015) Job stress, job burnout and safety performance in the Palestinian construction industry. Journal of Financial Management of Property and Construction, 20(02), 170-87.

Harada, S (2015) Bidding for private finance initiative projects: an analysis. Journal of Financial Management of Property and Construction, 20(02), 188-202.

  • Type: Journal Article
  • Keywords: bid-participating firms; bidding theory; competition effect; endogeneity
  • ISBN/ISSN:
  • URL: https://doi.org/10.1108/JFMPC-01-2015-0001
  • Abstract:
    Purpose – This paper aims to present a positive analysis of the bidding process for private finance initiative (PFI) projects. The analysis attempts to unravel how value for money (VFM) changes in the bidding process and what factors influence this change. Bidding theory postulates that the winning bid price drops from the effect of competition when the number of bid-participating firms increases. Design/methodology/approach – An instrumental variable analysis was conducted using a two-stage least-squares method to remove the influence of endogeneity in the number of bid participants, which, according to prior research and surveys of business operators, possibly explains some of the VFM change. The results were considered robust because no observable change was found in the positive effect of the number of participant firms. Findings – This paper provides positive evidence of the relationship between the number of firms and the bidding result. The analysis shows that the number of bid-participating firms clearly has a significant positive effect on VFM change. Specifically, competition lowers the winning bid amount in line with the theoretical proposition. Originality/value – This study confirms previous research based on bidding data of Japanese PFI projects, a segment not sufficiently researched so far. Further, increasing the number of participant firms, up to a maximum of six, is shown to raise the VFM, a result consistent with the fact that five major construction companies play a leading role in Japanese PFI projects.

Holt, G D, Akintoye, A and Davis, P T (2015) Editorial: Analysis of papers published in the Journal of Financial Management of Property and Construction 2010-2015. Journal of Financial Management of Property and Construction, 20(02), 106-15.

Sherrin, C, McAllister, P and Nanda, A (2015) The persistence of distance: A macro-level perspective on European cross-border real estate development flows. Journal of Financial Management of Property and Construction, 20(02), 147-69.