Mediating Role of Risk Perception of Trust and Contract Enforcement in the Construction Industry

Journal article


Yao, H., Chen, Y., Chen, Y. and Zhu, X. (2019). Mediating Role of Risk Perception of Trust and Contract Enforcement in the Construction Industry. Journal of Construction Engineering and Management. 145 (2), pp. 04018130-04018130. https://doi.org/10.1061/(asce)co.1943-7862.0001604
AuthorsYao, H., Chen, Y., Chen, Y. and Zhu, X.
Abstract

Contract violations have become common problems in construction projects, yet little of the construction contract literature addresses the question of responses to contract violations (i.e., contract enforcement). This research investigates the effects of trust on contract enforcement in a principal–agent relationship and explores the mediating role of risk perception on those effects. The authors distributed 429 electronic questionnaires and received 280 responses. After deleting responses completed in under 100 s and nonmanager responses, we narrowed the total to 253 valid responses from professionals in the Chinese construction industry. Hierarchical regression analyses were conducted to test the hypotheses in this study, and the findings revealed that goodwill-based trust diminishes the severity of contract enforcement, while perceived relational risk and perceived performance risk increase the severity of contract enforcement. Mediation analyses also support the mediating role of perceived relational risk on the effect of goodwill-based trust on contract enforcement. The findings contribute to contract theory by providing a thorough understanding of contract enforcement and developing a conceptual framework consisting of trust, perceived risk, and contract enforcement. Managers from violating parties may benefit from this article through an understanding of the role of trust and perceived risk in dealing with a contract violation and following the strategies recommended for diminishing the severity of contract enforcement.

This material may be downloaded for personal use only. Any other use requires prior permission of the American Society of Civil Engineers. This material may be found at https://ascelibrary.org/doi/10.1061/%28ASCE%29CO.1943-7862.0001604

Year2019
JournalJournal of Construction Engineering and Management
Journal citation145 (2), pp. 04018130-04018130
PublisherAmerican Society of Civil Engineers (ASCE)
ISSN0733-9364
Digital Object Identifier (DOI)https://doi.org/10.1061/(asce)co.1943-7862.0001604
Web address (URL)https://ascelibrary.org/doi/10.1061/%28ASCE%29CO.1943-7862.0001604
Publication dates
PrintFeb 2019
Online29 Nov 2018
Publication process dates
Accepted08 Aug 2018
Deposited16 Mar 2020
Accepted author manuscript
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Open
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