Modelling the effect of transaction cost determinants and governance on Australian offsite construction supply chain resilience

Purpose: The lack of a comprehensive understanding of the relationships between transaction cost determinants (TCDs) and supply chain resilience (SCR) has concerned the effective and efficient management of supply chain uncertainties in the offsite construction industry. Therefore, this study aims to examine the influence of TCDs, namely asset specificity, transaction frequency, transaction uncertainty, bounded rationality and opportunism, on SCR, grounded in transaction cost theory (TCT). Furthermore, it investigates the mediating role of governance in the relationship between TCDs and SCR. Design/methodology/approach: Data were collected from 97 Australian offsite construction supply chain partners via a questionnaire survey through a purposive sampling process. Data analysis was conducted quantitatively using partial least square structural equation modelling (PLS-SEM). Findings: The results revealed that asset specificity, transaction frequency and transaction uncertainty were significantly associated with SCR constructs. Governance confirmed a significant mediating effect on these relationships. Interestingly, opportunism did not have a significant negative relationship with the SCR constructs, suggesting the need to explore its behaviour in enhancing SCR. Bounded rationality demonstrated a significant direct association with SCR constructs regardless of the mediating effect of governance. Originality/value: This study provides novel insights by empirically testing the mediating effect of governance on the relationship between TCDs and SCR. It highlights the importance of promoting SCR with a minimum impact on the cost-effectiveness of offsite construction projects.