Academic journal article Journal of Business Economics and Management

Copras Based Comparative Analysis of the European Country Management Capabilities within the Construction Sector in the Time of crisis/Europos Valstybiu Gebejimo Valdyti Statybos Sektoriu Krizes Laikotarpiu Palyginamoji Analize Taikant Copras Metoda

Academic journal article Journal of Business Economics and Management

Copras Based Comparative Analysis of the European Country Management Capabilities within the Construction Sector in the Time of crisis/Europos Valstybiu Gebejimo Valdyti Statybos Sektoriu Krizes Laikotarpiu Palyginamoji Analize Taikant Copras Metoda

Article excerpt

1. Introduction

Strategically important construction sector includes designing of buildings, formation of the infrastructure connecting the whole economic sectors. This sector is named as the most important employer, it makes the great contribution to the common capital of European countries. Construction is one of the biggest industries in Europe it takes 10 percents of GDP and requires 50.5 percents of the capital investment. The construction sector employes over 12 millions of European citizens and involves 26 millions to the particular sphere of the construction industry DKM Economic Consultants (2010).

In comparison with other economic sectors the construction importance depends on the different factors. According to Kaklauskas et al. (2011) construction efficiency at most depends on certain number of variables at macro level and micro level. The costs of the ground area, design process, construction process, business competition, efficiency level of enterprises etc. are possibly at micro level. At macro level economic, politic, legal, technological, cultural and natural environments have an impact on the construction. Thus, construction sector depends on the set global and local factors which cause certain swings in the economic activity both in construction and other industrial branches.

You can notice that the relationship between construction section and economy was studied by lots of scientists (Giang and Pheng 2010; Pellicer et al. 2009; Khan 2008; Wigrena and Wilhelmsson 2007; Chiang et al. 2006; You and Zi 2007). For example, Pellicer et al. (2009) analyzed the effect of decay on the construction sector in terms of macroeconomics. Authors used regression model for study and forecast of the situation in construction sector. Chiang et al. (2006) used the tables of the model "input-output (i-o)" for study of the construction sector in macroeconomics terms. This model is efficient instrument for determination of effect of macroeconomic factors on the construction and construction forecasting. Giang and Pheng (2010) carried out theoretical study of construction role on the economy in accordance with three scenario: (a) Infrastructure is adequate for economic growth when the infrastructure is built ahead, then the business activities of other goods and services that the infrastructure helps create come into place; (b) Infrastructure becomes excessive when the infrastructure is constructed ahead as planned, but then an unexpected economic downturn occurs; and (c) Infrastructure is inadequate to support economic growth when there is an unexpected economic upturn. Khan et al. (2008) analyzed the relation between construction sector and GDP (gross domestic product) in 1950-2005. In Pakistan Granger causality test is used (Granger and Newbold 1974). To calculate the reliability of relations and results the Unit Root tests based on time series and Co-integration test were applied. Economic time series--is sequential array of the values of economic variables. Weekly, monthly, annual indexes of productions, costs, income, population size, labour power, gross domestic product (GDP) are examples of economic time series. Obtained results of the investigations show that there is a strong causal relation between economy and construction sector. Two types of econometric models (cointegration and error correction) were applied by Wigren and Wilhelmsson for investigations of construction market in the Western Europe (2007). After analyzing criteria characterized the construction sector of fourteen countries of the Western Europe it was concluded that investments in residential and non-residential building construction or in construction of other buildings have both direct and indirect impacts on economic growth. These investigations also detected that there is a strong relationship between infrastructure and economic productivity, particularly residential building construction has a long-term effect on the economic growth. …

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