Transaction Costs, Opportunistic Behavior and Performance of Construction Project Contracts, The Moderating Role of Contractual Complexity.
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Date
2025-10-16
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Makerere University Business School
Abstract
The study was aimed to establish how transaction costs, opportunistic behavior and contract performance in construction projects are influenced by the moderating role of contractual complexity. This study was guided by the Transaction Cost Economics Theory. This study used a combined descriptive-correlational and cross-sectional survey research design using a sample size of 161 out of 220 construction contracts of Rukungiri DLG using two respondents (contractors, project engineers and district representatives). Data was collected using Self-Administered Questionnaires and analyzed using Pearson Rank Correlation, Linear Regression and Moderation Multiple Regression in SPSS 26.0 and Smart PSL-SEM. The study revealed significantly a positive relationship between the transaction costs, opportunistic behavior and contracts performance. The study findings identified that transaction costs and opportunistic behaviors negatively affect the contracts performance by raising cost overruns, delays and compromised quality standards some construction projects implemented in Rukungiri district. The study also revealed that the relationship between the transaction’s costs and opportunistic behavior on contracts performance is weakened with the presence of the moderator role of contractual complexity. Furthermore, the findings recommended that all stakeholders in construction projects should emphasize development of comprehensive contractual agreements as critical players in improving the performance of construction projects. A researcher recommended that contractual complexity used as a governance mechanism of contractual functions during formation and execution of contracts could enhance contract performance. Designing the detailed construction contract functions would clearly define the roles, responsibilities and expectations of all parties involved. While the study results provide understanding with a focus on a specific geographical area, it limits applicability to other regions and future research should explore other factors such as technology adoption, pricing strategies and sustainable construction activities that could impact the contract performance of the entities. The study also revealed that the assessment and measure of contract performance was limited to project cost, quality and time as performance indicators proved. There is little attention or knowledge on client satisfaction, health and safety which need to be examined as measures of contract performance.
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This is a master's thesis.
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Ayebare, D. (2025). Transaction Costs, Opportunistic Behavior and Performance of Construction Project Contracts, The Moderating Role of Contractual Complexity. (Unpublished master's dissertation). Makerere University Business School, Kampala, Uganda.