IDEAS home Printed from https://ideas.repec.org/a/gam/jlands/v14y2025i7p1403-d1694370.html

Forging Enhanced Collaboration: Investigating Transaction Costs in Pre-Design Phase of Market-Oriented Community Renovation in China

Author

Listed:
  • Wanrong Li

    (School of Architecture, Tianjin University, Tianjin 300072, China
    Faculty of Architecture and Built Environment, Delft University of Technology, 2628 BL Delft, The Netherlands)

  • Queena Qian

    (Faculty of Architecture and Built Environment, Delft University of Technology, 2628 BL Delft, The Netherlands)

  • Erwin Mlecnik

    (Faculty of Architecture and Built Environment, Delft University of Technology, 2628 BL Delft, The Netherlands)

  • Shutong He

    (Business School, Central South University, Changsha 410083, China)

  • Kun Song

    (School of Architecture, Tianjin University, Tianjin 300072, China)

Abstract

In the context of urban regeneration, community renovation has been a vital approach for improving local living conditions and global sustainable development. Due to the financial burden and uneven regional development, China’s community renovation has gradually shifted from the government-led model to the market-oriented model. However, these projects are subject to various intra- and inter-stakeholder barriers, particularly hidden transaction costs. This study investigates the transaction costs experienced by key stakeholders, including residents, developers, governments, and architects, with a specific focus on the pre-design phase of market-oriented community renovation projects in China. Data on stakeholders’ experienced transaction costs and their origins were collected through semi-structured interviews and questionnaire surveys and were investigated using content analysis and quantitative analysis. Results show that developers bear the most categories of transaction costs. The most significant transaction costs persist in the interactions between developers and governments, including estimating benefits and costs and receiving project approval. Furthermore, negotiating costs are the primary obstructions that hinder stakeholder collaboration. By tracing the origins of these transaction costs, the study proposes measures to optimize the renovation process by reducing transaction costs.

Suggested Citation

  • Wanrong Li & Queena Qian & Erwin Mlecnik & Shutong He & Kun Song, 2025. "Forging Enhanced Collaboration: Investigating Transaction Costs in Pre-Design Phase of Market-Oriented Community Renovation in China," Land, MDPI, vol. 14(7), pages 1-26, July.
    • Handle: RePEc:gam:jlands:v:14:y:2025:i:7:p:1403-:d:1694370
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2073-445X/14/7/1403/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2073-445X/14/7/1403/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Stephen D. Williamson, 1987. "Costly Monitoring, Loan Contracts, and Equilibrium Credit Rationing," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(1), pages 135-145.
    2. Pardalis, Georgios & Talmar, Madis & Keskin, Duygu, 2021. "To be or not to be: The organizational conditions for launching one-stop-shops for energy related renovations," Energy Policy, Elsevier, vol. 159(C).
    3. Mlecnik, Erwin & Visscher, Henk & van Hal, Anke, 2010. "Barriers and opportunities for labels for highly energy-efficient houses," Energy Policy, Elsevier, vol. 38(8), pages 4592-4603, August.
    4. Wen, Huwei & Lee, Chien-Chiang & Zhou, Fengxiu, 2022. "How does fiscal policy uncertainty affect corporate innovation investment? Evidence from China's new energy industry," Energy Economics, Elsevier, vol. 105(C).
    5. Kaihuai Liao & Rainer Wehrhahn & Werner Breitung, 2019. "Urban planners and the production of gated communities in China: A structure–agency approach," Urban Studies, Urban Studies Journal Limited, vol. 56(13), pages 2635-2653, October.
    6. Murto, Pekka & Jalas, Mikko & Juntunen, Jouni & Hyysalo, Sampsa, 2019. "The difficult process of adopting a comprehensive energy retrofit in housing companies: Barriers posed by nascent markets and complicated calculability," Energy Policy, Elsevier, vol. 132(C), pages 955-964.
    7. Lingyan Li & Jiaxin Zhu & Mimi Duan & Pingbo Li & Xiaotong Guo, 2022. "Overcoming the Collaboration Barriers among Stakeholders in Urban Renewal Based on a Two-Mode Social Network Analysis," Land, MDPI, vol. 11(10), pages 1-23, October.
    8. Cheol-Joo Cho, 2011. "An Analysis of the Housing Redevelopment Process in Korea through the Lens of the Transaction Cost Framework," Urban Studies, Urban Studies Journal Limited, vol. 48(7), pages 1477-1501, May.
    9. Sorrell, Steve, 2007. "The economics of energy service contracts," Energy Policy, Elsevier, vol. 35(1), pages 507-521, January.
    10. Chen, Yang & Zhang, Xiaoling & Chau, K.W. & Yang, Linchuan, 2022. "How the institutional change in urban redevelopment affects the duration of land redevelopment approval in China?," Land Use Policy, Elsevier, vol. 119(C).
    11. Tingting Lu & Fangzhu Zhang & Fulong Wu, 2020. "The variegated role of the state in different gated neighbourhoods in China," Urban Studies, Urban Studies Journal Limited, vol. 57(8), pages 1642-1659, June.
    12. Alvanchi, Amin & Jafari, Mohammad Amin & Shabanlou, Mohammad & Meghdadi, Zeinab, 2021. "A novel public-private-people partnership framework in regeneration of old urban neighborhoods in Iran," Land Use Policy, Elsevier, vol. 109(C).
    13. Tal Alster & Nufar Avni, 2022. "The divergent logics of urban regeneration in Israel: A neoliberal toolkit and national rationales," Urban Studies, Urban Studies Journal Limited, vol. 59(13), pages 2719-2738, October.
    14. Hoppe, Thomas, 2012. "Adoption of innovative energy systems in social housing: Lessons from eight large-scale renovation projects in The Netherlands," Energy Policy, Elsevier, vol. 51(C), pages 791-801.
    15. Fangyun Xie & Guiwen Liu & Taozhi Zhuang, 2021. "A Comprehensive Review of Urban Regeneration Governance for Developing Appropriate Governance Arrangements," Land, MDPI, vol. 10(5), pages 1-28, May.
    16. Camilo A. Ramírez Rincón & João Santos & Leentje Volker & Robert Rouwenhorst, 2021. "Identifying Institutional Barriers and Enablers for Sustainable Urban Planning from a Municipal Perspective," Sustainability, MDPI, vol. 13(20), pages 1-24, October.
    17. Lawrence W. C. Lai & Stephen N. G. Davies & Lennon H. T. Choy & K. W. Chau, 2022. "Land Planning, Property Rights and Management of Built Heritage: Some Hong Kong Observations of Colonial Military Buildings," Land, MDPI, vol. 11(9), pages 1-20, September.
    18. Luciana Maria Miu & Natalia Wisniewska & Christoph Mazur & Jeffrey Hardy & Adam Hawkes, 2018. "A Simple Assessment of Housing Retrofit Policies for the UK: What Should Succeed the Energy Company Obligation?," Energies, MDPI, vol. 11(8), pages 1-22, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yiru Jia & Nicky Morrison & Franziska Sielker, 2023. "Delivering common property in Chinese contractual communities: Law, power and practice," Urban Studies, Urban Studies Journal Limited, vol. 60(16), pages 3272-3293, December.
    2. Lang, Ghislaine & Lanz, Bruno, 2021. "Energy efficiency, information, and the acceptability of rent increases: A survey experiment with tenants," Energy Economics, Elsevier, vol. 95(C).
    3. Innes, Robert, 1987. "Adverse Selection And Tax Externalities In A Model Of Entrepreneurial Investment," Working Papers 225812, University of California, Davis, Department of Agricultural and Resource Economics.
    4. Li, Yuanyuan & Wigniolle, Bertrand, 2017. "Endogenous information revelation in a competitive credit market and credit crunch," Journal of Mathematical Economics, Elsevier, vol. 68(C), pages 127-141.
    5. Luo, Tao & Khoshnevisan, Benyamin & Huang, Ruyi & Chen, Qiu & Mei, Zili & Pan, Junting & Liu, Hongbin, 2020. "Analysis of revolution in decentralized biogas facilities caused by transition in Chinese rural areas," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).
    6. Dachs, Bernhard & Biege, Sabine & Borowiecki, Marcin & Lay, Gunther & Jäger, Angela & Schartinger, Doris, 2012. "The Servitization of European Manufacturing Industries," MPRA Paper 38873, University Library of Munich, Germany.
    7. Eijffinger Sylvester C. W. & Goderis Benedikt, 2007. "Currency Crises, Monetary Policy and Corporate Balance Sheets," German Economic Review, De Gruyter, vol. 8(3), pages 309-343, August.
    8. Guariso, Giorgio & Sangiorgio, Matteo, 2019. "Multi-objective planning of building stock renovation," Energy Policy, Elsevier, vol. 130(C), pages 101-110.
    9. Dalia Streimikiene & Tomas Balezentis, 2020. "Willingness to Pay for Renovation of Multi-Flat Buildings and to Share the Costs of Renovation," Energies, MDPI, vol. 13(11), pages 1-16, May.
    10. Gabriel Madeira, 2014. "Legal enforcement, default and heterogeneity of project-financing contracts," Annals of Finance, Springer, vol. 10(4), pages 569-602, November.
    11. Robin Boadway & Motohiro Sato & Jean-Francois Tremblay, 2015. "Cash-flow business taxation revisited: bankruptcy, risk aversion and asymmetric information," Working Papers 1531, Oxford University Centre for Business Taxation.
    12. Benjamin Eden, 2009. "The Role of Government in the Credit Market," Vanderbilt University Department of Economics Working Papers 0907, Vanderbilt University Department of Economics.
    13. Zheng, Yunjian & Lin, Chen & Yan, Jiale & Guo, Yani, 2025. "How to enhance the innovation capacity of technology-based enterprises: A fuzzy set qualitative comparative analysis," International Review of Economics & Finance, Elsevier, vol. 97(C).
    14. Wang, Kai-Hua & Zhao, Yan-Xin & Jiang, Cui-Feng & Li, Zheng-Zheng, 2022. "Does green finance inspire sustainable development? Evidence from a global perspective," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 412-426.
    15. Damiano Sandri & FabiÁn Valencia, 2013. "Financial Crises and Recapitalizations," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(s2), pages 59-86, December.
    16. Huybens, Elisabeth & Smith, Bruce D., 1998. "Financial Market Frictions, Monetary Policy, and Capital Accumulation in a Small Open Economy," Journal of Economic Theory, Elsevier, vol. 81(2), pages 353-400, August.
    17. repec:cty:dpaper:1441 is not listed on IDEAS
    18. Beck, T.H.L., 2007. "Financing constraints of SMEs in developing countries : Evidence, determinants and solutions," Other publications TiSEM 85aac075-08b5-44ce-bf1a-9, Tilburg University, School of Economics and Management.
    19. Constant Fouopi Djiogap & Jacques Simon Song, 2016. "Qualité des institutions, structure de propriété et efficacité des banques dans la CEMAC ," African Development Review, African Development Bank, vol. 28(4), pages 496-508, December.
    20. Lou, Zhaohui & Xie, Qizhuo & Shen, Jim Huangnan & Lee, Chien-Chiang, 2024. "Does Supply Chain Finance (SCF) alleviate funding constraints of SMEs? Evidence from China," Research in International Business and Finance, Elsevier, vol. 67(PA).
    21. Bossink, Bart A.G., 2017. "Demonstrating sustainable energy: A review based model of sustainable energy demonstration projects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 1349-1362.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jlands:v:14:y:2025:i:7:p:1403-:d:1694370. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.