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Cameron, I and Hare, B (2008) Planning tools for integrating health and safety in construction. Construction Management and Economics, 26(09), 909.

Chiara, N and Garvin, M J (2008) Variance models for project financial risk analysis with applications to greenfield BOT highway projects. Construction Management and Economics, 26(09), 39.

Damnjanovic, I, Duthie, J and Waller, S T (2008) Valuation of strategic network flexibility in development of toll road projects. Construction Management and Economics, 26(09), 90.

Huang, Y-L (2008) The pricing of conditional performance guarantees with risky collateral. Construction Management and Economics, 26(09), 78.

  • Type: Journal Article
  • Keywords: guarantees; contractor default probability; collateral; credit default swap; pricing; models
  • ISBN/ISSN: 0144-6193
  • URL: https://doi.org/10.1080/01446190802290469
  • Abstract:
    Conditional performance guarantees with risky collaterals are specific bonding instruments that are not credit extensions or require only a service fee. Instead, they resemble a credit default swap (CDS) that is essentially an insurance contract and can thus be priced accordingly. A CDS-based model is proposed here for pricing these instruments. The model incorporates both contractor default probability and the recovery risk of collateral. It also allows for explicit specification of bonding parameters such as the promised amount of payment in the event of default. For model implementation, a quasi-KMV-Merton approach is proposed for the estimation of contractor default probability. The historical market prices and basic accounting data of publicly traded construction firms in the Taiwan Economic Journal Database (TEJD) are used to test the model. The model demonstrates effective statistical power to distinguish categorized samples of the firms. It shows that the current industrial practice of asking a standard service rate of 1% tends to charge too little for financially distressed firms and too much for normal ones.

Jaillon, L and Poon, C S (2008) Sustainable construction aspects of using prefabrication in dense urban environment: a Hong Kong case study. Construction Management and Economics, 26(09), 66.

Laryea, S and Hughes, W (2008) How contractors price risk in bids: theory and practice. Construction Management and Economics, 26(09), 24.

Li, H, Guo, H, Skibniewski, M J and Skitmore, M (2008) Using the IKEA model and virtual prototyping technology to improve construction process management. Construction Management and Economics, 26(09), 1000.

Styhre, A (2008) The role of social capital in knowledge sharing: the case of a specialist rock construction company. Construction Management and Economics, 26(09), 51.