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Modelling the Relationship Between the Level of Adoption of Sustainability Practices and Performance of Construction Firms Using Structural Equation Modelling

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  • Otali Monday
  • Udo Godfey

    (University of Uyo, Uyo, Nigeria)

  • Idoro Godwin

    (University of Lagos, Lagos, Nigeria)

Abstract

The need to carry out construction activities in a sustainable manner in the Niger Delta region of Nigeria has become very imperative. The aim of the study was to establish the relationship between the adoption of sustainable construction practices and performance of construction firms using a structural equation modelling approach. In tandem with the survey approach adopted for the study, 1179 copies of structured questionnaire were administered while 980 valid responses were received giving a response rate of 83.2 %. Data were analysed using descriptive statistics and structural equation modelling. This study revealed that the extent of implementation of sustainable construction practices accounted for 36 %, 37.8 %, 43.5 %, 51.6 %, 65.8 %, and 32.9 % of the variability in annual employment growth, annual financial turnover, remuneration and benefits, general employee satisfaction, social performance and net income growth of the construction firms, respectively. The study concluded that there was a positive relationship between the extent of implementation of sustainable construction practices and firm performance. It was also concluded that the adoption level of sustainable construction practices accounted for 85 % of the variability in the overall firm performance. Hence, proper implementation of sustainability practices at the firm level leads to improvement in the firm performance. It was recommended that construction firms should not use only financial performance indicators to evaluate their performance level but rather use multi-dimensional approaches. This will enable firms to have holistic knowledge of the level of their performance. The construction firms should adopt the structural equation model developed in the study to carry out integrated performance measurement.

Suggested Citation

  • Otali Monday & Udo Godfey & Idoro Godwin, 2020. "Modelling the Relationship Between the Level of Adoption of Sustainability Practices and Performance of Construction Firms Using Structural Equation Modelling," Baltic Journal of Real Estate Economics and Construction Management, Sciendo, vol. 8(1), pages 129-151, January.
    • Handle: RePEc:vrs:bjrecm:v:8:y:2020:i:1:p:129-151:n:10
    DOI: 10.2478/bjreecm-2020-0010
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    References listed on IDEAS

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