Journal of Management Information and Decision Sciences (Print ISSN: 1524-7252; Online ISSN: 1532-5806)


Modelling the Determinants of Plant and Equipment Acquisition Option among Construction Organisations

Author(s): Bondinuba, F.K., Dadzie, J., Eyaih, A.K., Marfo, D.

 Purpose: This paper modelled the variable that influences construction organisations decisions to acquire their P&E through purchase, hiring or leasing.

Study design/methodology/approach: The paper sought to validate the financial variables of contractors through factor analysis approach. 68 respondents were sampled from two regions in Ghana in a survey that used a self-administered structured questionnaire for data collection. It was followed by a logit regression analysis, which is a method for modelling the dependence of a binary response variable on one or more explanatory variables that significantly determine contractor’s plant and equipment acquisition decisions.

Findings: It emerged that construction project, construction industry and financial factors are the most critical determinant in predicting construction organisation decisions to purchase, hire or lease a plant for construction works in Ghana.

Originality/value: The paper contributes to the literature in the areas of plant and equipment management and financing in developing countries

Research limitations: It is cautioned that the results of the present study should be interpreted within the context of Sub-Sahara Africa, especially Ghanaian construction context, and similar studies should be done in similar contexts in different countries to compare the results before generalisations could be made.

Practical implications: Construction organisations could conveniently use the derived instrument items to aid in their plant and equipment decision making.

Social implications: The paper a wider social value in terms of influencing the construction business community on their perception and acceptance of the findings in their managerial decision making towards improving their plant and equipment acquisition decision making.

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