Theoretical and Empirical Analysis of Construction Market Competition and Its Implications for Public Cost Management in Nigeria

The structure and competitive dynamics of Nigeria's construction market have direct implications for the cost efficiency of public infrastructure procurement, yet a rigorous theoretical and empirical analysis of construction market competition in the Nigerian context is absent from the scholarly literature. This study conducts a theoretical and empirical analysis of construction market competition and its implications for public cost management in Nigeria. A positivist paradigm underpins a quantitative design employing industrial organisation theory to model market structure across building and civil engineering subsectors in six geopolitical zones. Primary data from 280 contractors, procurement officers, and quantity surveyors were supplemented by secondary data on tender participation rates, bid price dispersion, and contractor market shares over a 10-year period. Herfindahl-Hirschman indices, bid concentration analysis, and regression modelling were applied. Findings reveal significant regional variation in market concentration, with the North East and North West civil engineering markets characterised by near-oligopolistic conditions following security-related market consolidation. Concentrated markets show systematically higher average bid prices and lower post-award performance standards. The study establishes a significant negative relationship between market concentration indices and public cost management efficiency outcomes. A construction market reform model for Nigeria is proposed, grounded in industrial organisation theory and validated through international comparator analysis. This research makes an original empirical and theoretical contribution to construction economics in a developing country context. Keywords: market competition, construction industry, public cost management, Nigeria, industrial organisation