Exploring transaction costs in the prefabricated housing supply chain in China

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The growing environmental problems, the rapid urbanization, and the disappearance of the demographic dividend in China has brought unprecedented opportunities to the development of prefabricated housing (PH). However, many barriers are hindering the promotion of PH, for instance, cost, lack of regulations, and the shortage of knowledge, among which cost is identified as one of the most critical barriers. Unlike previous studies focused only on production costs, this research aims to investigate transaction costs (TCs), e.g., searching costs, negotiation costs, and enforcement costs. First, this paper develops a theoretical TCs framework of the PH supply chain, based on an extensive literature review. Secondly, an empirical study was conducted on two cases in Chongqing to validate the TCs framework. Key stakeholders are identified by Social Network Analysis (SNA). Subsequently, 25 semi-structured interviews were conducted with key stakeholders, both to verify the new TCs framework and to explore stakeholder concerns about TCs. The centrality metrics by SNA identified six key stakeholders who have a significant influence on TCs. It is found from the interviews that both the conceptual phase and the construction phase are stages where the majority of TCs occur. Both the developer and the general contractor are paying for more TCs compared to the other stakeholders. This study contributes to theory by initially introducing the concepts of TCs to the PH field, and the findings bring implications on the governance of PH supply chain to both private stakeholders and the government.
Original languageEnglish
Pages (from-to)550-563
Number of pages14
JournalJournal of Cleaner Production
Publication statusPublished - 2019

Bibliographical note

Green Open Access added to TU Delft Institutional Repository ‘You share, we take care!’ – Taverne project https://www.openaccess.nl/en/you-share-we-take-care

Otherwise as indicated in the copyright section: the publisher is the copyright holder of this work and the author uses the Dutch legislation to make this work public.


  • Transaction costs
  • Prefabricated housing
  • Construction supply chain
  • Stakeholders
  • Social network analysis
  • Sustainability


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