Dynamic changes of governance mechanisms in mega construction projects in China

Abstract

PurposeThe purpose of this paper is to study the mechanisms governing dynamic changes in relational and contractual governance at different stages of government-funded mega construction projects (MCPs) by studying their different effects on project performance and participants’ opportunism.Design/methodology/approachPartial least squares structural equation modeling was used to test eight hypotheses based on data collected from 147 respondents in different participating organizations in Chinese MCPs.FindingsFirst, contractual governance has a stronger positive impact on project performance than relational governance in the early stage of MCPs, while relational governance exerts more positive effects on project performance than contractual governance in the middle and late stages. Second, opportunism is a mediator variable between governance mechanisms and project performance, and relational governance is more effective than contractual governance in restricting opportunism.Originality/valueIn contrast to a static analysis of project governance mechanisms, this study examines dynamic changes in the governance mechanisms of MCPs in the Chinese context by considering the mediating role of opportunism as well as guanxi as an element of relational governance, thus filling in gaps in the literature on MCP governance and contributing to the development of MCP management theory.