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Title: Market structure of the construction industry in Hong Kong
Authors: Chiang, YH 
Tang, BS
Leung, WY
Keywords: Construction
Herfindahl-Hershamann indices
Hong Kong
Market structure
Issue Date: 2001
Publisher: Routledge, Taylor & Francis Group
Source: Construction management and economics, 2001, v. 19, no. 7, p. 675-687 How to cite?
Journal: Construction management and economics 
Abstract: This study examines the market structure of four different sectors within the construction industry in Hong Kong. Market concentrations, expressed in terms of Herfindahl-Hershamann indices (HHIs) and number equivalents (HNEs), are calibrated for the top five contractors and compared with those of the local property industry. The study reveals the following ascending order of market concentrations: private building, public building, property development, and civil engineering. Our explanation is that technological and capital requirements have imposed a strong barrier to entry into the civil engineering sector, resulting in a concentrated market. Conversely, the lack of technological demand and supply in the private building sector has led to easy market entry and exit. Building contractors thus compete intensely on cost reduction rather than technology improvement, leading to poor construction safety and product quality. The paper concludes that the Government, being a major client of construction works and regulator of the industry, can assume a more active role in promoting the overall competitiveness of indigenous local contractors in Hong Kong.
ISSN: 0144-6193
EISSN: 1466-433X
DOI: 10.1080/01446190110067046
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