Institutional governance of innovation adoption in residential developments: future research directions

Godwin Kavaarpuo

Chapter 13 in A Research Agenda for Real Estate, 2022, pp 245-262 from Edward Elgar Publishing

Abstract: Most studies diagnosing the problem of reluctant innovation in housing delivery have identified barriers. This paper presents a critical review of these barriers using content analysis. While instructive, most studies had no explicit theoretical underpinnings and lacked cogent explanations for developers' decisions to adopt, reject or discontinue the use of innovative housebuilding technologies. This paper presents an alternative framework to understand residential developers' innovation adoption behaviour further, proposing a shift to a micro-analytical unit, the transaction. Four key dimensions are highlighted based on transaction cost economics; 1. Innovations - decision making and implementation - are idiosyncratic transactions with non-zero transaction costs, 2. the trade gains from discretionary economic transactions depend on the efficacy of intentionally designed institutional governance mechanisms to economise transaction costs and hazards, 3. innovation choices are satisficing and contracts are inevitably incomplete, and 4. innovations are specific assets with severer uncertainties relative to business-as-usual housing products and development. The role of institutions to either constrain or facilitate entrepreneurial actions is demonstrated. The paper concludes with an outline of crucial research issues for future research.

Keywords: Economics and Finance; Urban and Regional Studies (search for similar items in EconPapers)
Date: 2022
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