IJEBD (International Journal of Entrepreneurship and Business Development)

the Effect of Corporate Governance and Liquidity Risk on Firm Value in the Banking Subsector Listed on the Indonesia Stock Exchange in 2022-2024

2026-10-12T06:57:00+07:00

ABSTRACT

Purpose: The main purpose of this study is to gain a better understanding of the impact of corporate governance and liquidity risk on firm value, both partially and simultaneously.

Design/methodology/approach: This research uses a quantitative method by utilizing secondary data taken from annual reports and financial statements of banking companies listed on the Indonesia Stock Exchange for the 2022-2024 period. The samples used in the study were selected using a purposive sampling method, resulting in 120 observations from 40 banks over three years. For data analysis, multiple linear regression is used with the support of IBM SPSS Statistics software through classical assumption testing, which includes tests for normality, multicollinearity, heteroscedasticity, hypothesis testing (t-test), Simultaneous Test (F Test), and autocorrelation. In addition, data transformation and the use of lag methods were also conducted to improve the accuracy of the research model.

Findings: Evidence shows that corporate governance does not have a significant effect on Company Value, while Liquidity Risk has a significant effect. These findings indicate that investors are more responsive to the company's financial condition compared to the corporate governance structure. Simultaneously, corporate governance and liquidity risk have a significant effect on company value in the banking subsector listed on the Indonesia Stock Exchange for the 2022-2024 period.

Research limitations/implications: This research has several limitations, namely that it only uses two independent variables, namely corporate governance and liquidity risk. Furthermore, the corporate governance variable is only proxied using independent commissioners, so it does not fully reflect the quality of corporate governance implementation as a whole. In addition, the time scope of this research is limited to specific periods and company sectors.

Practical implications: This research highlights the importance of liquidity risk management as well as the implementation of corporate governance in increasing investor confidence and capital market efficiency, which will ultimately support sustainable economic growth and development.

Originality/value: This research contributes to the development of literature on the influence of corporate governance and liquidity risk on firm value in the banking subsector in Indonesia. The value of this study lies in the utilization of the latest data from 2022 to 2024 as well as testing both variables simultaneously to explain firm value.

Paper type: Research Paper

Keyword: Corporate Governance, Liquidity Risk, Firm Value, Agency Theory, Signaling Theory.

Determinants of the Effectiveness of Public Procurement Risk Management Processes in Tanzania: Evidence from Tanzania Public Service College

2026-10-14T11:03:02+07:00

This study examined the factors affecting the effectiveness of public procurement risk management at Tanzania Public Service College. Guided by the Resource-Based View and Stakeholder Involvement theories, the study focused on human capital, organizational culture, top management support, and stakeholder involvement.

Design/methodology/approach: The study employed a quantitative approach; data were collected from 120 respondents through structured questionnaires and analysed using descriptive and inferential statistics

Findings: The findings showed that the four factors jointly explained 88.1% of the variation in procurement risk management effectiveness (R² = 0.881, p < 0.001). Stakeholder involvement was identified as the strongest influencing factor, followed by top management support, human capital, and organizational culture

Research limitations/implications: The study employed a case study research design, which may limit the generalisability of the findings to other organisations, industries, or geographical contexts.

Practical implications: The findings imply that the adoption of green logistics practices can contribute to the reduction of operational costs and improve overall organisational performance.

Originality/value: The study contributes original empirical evidence, as the data were collected directly by the researcher from the selected study sample.

The INFLUENCE OF PRACTICAL BANKING EXPERIENCE ON OPERATIONAL RISK IDENTIFICATION IN MAURITIAN BANKS

2026-10-14T11:07:42+07:00

Operational risk remains a significant challenge for the banking sector, particularly in developing economies where institutional resilience is still evolving. While much of the academic and regulatory discourse has focused on frameworks and systems, the role of human capital, specifically practical banking experience, in identifying operational risks remains underexplored. This study investigates the correlation between practical banking experience and the identification of operational risks in the Mauritian banking sector. This study employs a descriptive, cross?sectional survey of banking staff in Mauritius (150 distributed, 104 complete) and analyses the data through statistical analyses namely; Pearson correlation, chi?square tests and multiple regression. The study revealed a positive and significant relationship between the level of practical banking experience and the ability to recognise key risk exposures. These findings suggest that banking experience enhances operational risk sensitivity and underscores the need to integrate staff experience into risk governance frameworks. The study contributes to the literature on risk management and offers practical insights for improving governance, training, and regulatory practices within emerging financial markets.

The Effect of Attitude, Subjective Norm, and Behavioral Control on High School Students' Entrepreneurial Intention with Strategic Thinking as a Moderation

2026-10-14T11:08:39+07:00

Purpose: It's been hoped that skilled entrepreneurs will emerge from college graduates. In reality, most college graduates prefer to look for jobs rather than become entrepreneurs. Although various surveys indicate a high level of entrepreneurial intention among college students, most graduates fail to realize this desire upon graduation. This phenomenon has prompted the need to identify entrepreneurial intention at an earlier age, specifically among high school students and their equivalents. This study was conducted to examine the influence of the elements of the Theory of Planned Behavior (TPB), consisting of attitudes, subjective norm, and behavioral control, on entrepreneurial intention among high school students who are expected to become excellent entrepreneurs in the future. There is also a strategic thinking variable as a moderator of the influence of the variables of attitude, subjective norms, and behavioral control, on entrepreneurial intention.

Design/methodology/approach: Data analysis was carried out using the partial least square (PLS) technique which was run with the help of the SmartPLS application version 3.2.9.

Findings: The population of this study were high school students in Surabaya and its surrounding areas. The results from the sample of that population (n = 133) showed that of the elements of the TPB model, only the behavioral control was proven to significantly influence the entrepreneurial intention of high school students. All moderating effects of the strategic thinking were also not proven significant. However, it was found that strategic thinking itself independently had a significant influence on entrepreneurial intention.

Research limitations/implications: This research was conducted in a relatively short time and the sample size was not too large, although it exceeded the minimum number of respondents considered suitable for data analysis. Further research is needed to explore various variables that can more strongly link the TPB model to the formation of entrepreneurial intention, both through mediation and moderation.

Practical implications: Various educational institutions, particularly high schools, need to adopt models for developing positive behavioral control and strategic thinking competencies in their entrepreneurship-oriented curriculum.

Originality/value: So far, no other research has been found that examines the moderating effect of strategic thinking in the model of forming entrepreneurial intention, especially among high school students.

Paper type: Research paper

Keyword: Attitude, Behavioral Control, Entrepreneurial Intention, High School Students, Strategic Thinking, Subjective Norm.

What Makes Firm Value Stronger? Sustainability, Governance or Profitability?

2026-10-14T11:16:56+07:00

Purpose: The purpose of this research is to examine the effect of Sustainability Reporting and Good Corporate Governance (GCG) based on ASEAN Corporate Governance Scorecard to Firm Value, and to test the function of profitability as moderating variable.

Design/Methodology/Approach: This study employed an explanatory quantitative research design. The research population consists of 113 companies that are in the Basic Materials sector listed on the Indonesia Stock Exchange for the period 2021-2024. From the purposive sampling technique used, a sample of 19 companies was obtained with 76 observations. Corporate Sustainability Reporting was measured by Sustainability Reporting Disclosure Index refer to Global Reporting Initiative; Good Corporate Governance was assessed using the ASEAN Corporate Governance Scorecard; profitability was measured by ROA (Return on Assets); and firm value was assessed by PBV (Price to Book Value). The data were analysed with the method of multiple linear regression and moderated regression analysis was reviewed by IBM SPSS Statistics.

Findings: Sustainability Reporting positively and significantly impacted firm value by coefficient of 0.734 and significance level of 0.025. Good Corporate Governance also positively and significantly impact with coefficient 4.129 and significance level of 0.003. Profitability and Sustainability Reporting did not interact with statistical significance (?= -10.741; p = 0.128), while Good Corporate Governance interacted with profitability with a positive effect and statistical significance (? = 61.381; p = 0.030). Moderation model explains 43.0% of variation of Firm Value.

Research Limitations/Implications: This research data set consists of only companies from the Basic Materials industry. The research method used was content analysis, which could potentially lead to researchers’ subjective interpretation. Additional future studies might investigate disclosure quality in more depth and consider using control variables and panel data techniques.

Practical Implications: Firms should integrate the sustainability disclosure with substantive governance and a focus on profitability. Investors may evaluate a company's future potential based on the combination of sustainability, governance and profitability information.

Originality/Value: The research novelty lies in the integration of GRI-based Sustainability Reporting and ACGS-based Good Corporate Governance measurements in the profitability moderation model on Indonesian Basic Materials.

Paper Type: Research Paper

Keywords: Sustainability Reporting; Good Corporate Governance; ACGS; Profitability; Firm Value

THE EFFECT OF COMPETENCY TRAINING EFFECTIVENESS ON EMPLOYEE PERFORMANCE AT THE DIRECTORATE OFFICE OF PABRIK GULA RAJAWALI I SURABAYA

2026-10-14T11:14:04+07:00

Purpose: This research analyses whether perceived competency training effectiveness is associated with employee performance at the Directorate Office of Pabrik Gula Rajawali I Surabaya. The focus is not only on whether training is positively received, but also on whether the response pattern is strong enough to explain differences in work performance scores.

Design/methodology/approach: The manuscript applies a quantitative associative design using 60 structured employee responses prepared from the converted quantitative instrument. Competency training effectiveness and employee performance were each measured through ten Likert-scale items. The data were examined through descriptive statistics, item validity, Cronbach's alpha reliability, Pearson correlation, and simple linear regression.

Findings: Training effectiveness obtained an average total score of 39.15 out of 50, or 3.92 per item. Employee performance averaged 38.62 out of 50, or 3.86 per item. The instrument was internally consistent, with Cronbach alpha values of 0.859 for training effectiveness and 0.856 for employee performance. The regression model was significant, F = 34.71, p < 0.001, with a slope of 0.607. Training effectiveness explained 37.4% of employee performance variance.

Research limitations/implications: This study is limited to the available quantitative dataset; therefore, future research should involve broader field data to strengthen the generalisability of the findings. The model is analytically useful but should not be read as a complete explanation of employee performance.

Practical implications: Training programmes need to be followed by workplace application, supervisor feedback, and performance monitoring. The results suggest that training delivery alone is insufficient when post-training transfer is weak.

Originality/value: This article provides a quantitative perspective on competency training effectiveness and employee performance in the Indonesian sugar industry context.

Paper type: Research Paper

Entrepreneurial Orientation and Business Motivation as Determinants of Micro and Small Enterprise Performance: The Mediating Role of Business Innovation

2026-10-20T22:18:58+07:00

Purpose: This study examines the effects of entrepreneurial orientation on business innovation and business performance, the effects of business motivation on business innovation and business performance, and the effect of business innovation on the performance of micro and small enterprises (MSEs).

Design/methodology/approach: This quantitative study employed an explanatory design and hypothesis testing. The unit of analysis comprised MSE owner-managers from a population of 229 enterprises. The sample size was calculated using Slovin's formula, yielding 146 respondents (63.76% of the population), who were selected through purposive sampling. Questionnaires were administered for one month, from January 1 to January 31, 2026, and all 146 respondents completed them. The resulting data were therefore considered sufficiently representative of the study population.

Findings: Path analysis shows that entrepreneurial orientation has positive and significant direct effects on business innovation and business performance, with standardized coefficients of 0.296 (p = 0.019) and 0.417 (p = 0.037), respectively. Business motivation also has positive and significant direct effects on business innovation and business performance, with standardized coefficients of 0.278 (p = 0.028) and 0.358 (p = 0.031), respectively. Business innovation, in turn, has a positive and significant direct effect on MSE performance, with a standardized coefficient of 0.293 (p = 0.048). These findings indicate that entrepreneurial orientation and business motivation, when underpinned by autonomy and responsiveness to environmental change, foster creativity and strengthen business innovation. This enables enterprises to manage resources more effectively and efficiently and thereby improve their performance. Business innovation centered on digital platforms and social media allows enterprises to serve customers more quickly, conveniently, and flexibly, without the constraints of time or location, which further improves performance. MSE performance can be enhanced when management responds to environmental change, translates that responsiveness into business processes, and promotes creativity and innovation across business management, managerial functions, and the business cycle. Entrepreneurial orientation, business motivation, and business innovation are therefore relevant antecedents of MSE performance. Accordingly, H₁, H², H₃, H₄, H₅ are supported because all tested direct effects are positive and significant at the 5% level.

Paper type: Research paper

THE IMPACT OF JOB DEMANDS AND WORK ENVIRONMENT ON BURNOUT

2026-10-20T22:19:43+07:00

Purpose: This study aims to analyze and determine the effect of job demands and the work environment on burnout, as well as to examine the role of perceived organizational support POS as a moderating variable among employees at Sentra Wyata Guna Bandung. This research was conducted to understand the extend to which organizational support. Can mitigate the negative impacts of work stressors and reduce burnout levels to maintain employees psychological well-being.
Design/methodology/approach: This study utilizes a quantitative approach, with the population encompassing all employees at Sentra Wyata Guna Bandung. A saturation sampling technique was employed because of the limited population size, meaning all members of the population were included as respondents. Data collection was conducted using structured questionnaires with a 1-5 Likert scale. Meanwhile, the analytical technique applied is variance-based Structural Equation Modeling PLS=SEM using SmartPLS software to evaluate both the outer model and the inner model.
Findings: The results show that job demands have a positive and significant effect on burnout (?=0,322; p=0,000), meaning that high job demands directly accelerate employee burnout. Conversely, the work environment has a negative and significant effect on burnout (?=?0,309; p=0,000), acting as a protective factor for employees. Regarding the moderation pathways, perceived organizational support (POS) is proven to significantly moderate and weaken the positive effect of job demands on burnout (?=?0,162; p=0,001). Furthermore, POS also significantly moderates and strengthens the negative effect of the work environment on burnout bertindak sebagai faktor pelindung karyawan. Untuk jalur moderasi, perceived organizational support (POS) terbukti secara signifikan memoderasi dan memperlemah pengaruh positif job demands terhadap burnout (?=?0,187; p=0,000), confirming its crucial role as an organizational safety net.
Research limitations/implications: This study is limited in scope toa single government social rehabilitation institution, Sentra Wyata Guna Bandung, which features a specific public sector respondent characteristic. Additionally, the variables examined are restricted to job demands, the work environment, and POS; therefore, otrher variables influencing employee burnout such as leadership style, workload compensation, or work life balance may still exist.
Practical implications: The findings of this study can serve as strategic considerations for management in controlling burnout through proportional workload restructuring and improvements to both the physical and social work environments. Organizations must actively foster a high support climate (POS) through appreciation programs and a focus on employee well-being, ensuring that staff members facing high social service demands remain psychologically protected and productive
Paper type: Research Paper
Keyword: Burnout, Job Demands, Perceived Organizational Support (POS), Social Services, Work Environment.

The Effect of Competence and Person–Job Fit on Employee Performance in Supporting Organizational Performance: Evidence from a Manufacturing Company in Cirebon

2026-10-20T22:20:58+07:00

Purpose: This study aims to examine the effect of competence and person–job fit on employee performance in medium-scale manufacturing companies in Cirebon.

Design/methodology/approach: This study employs a quantitative approach with an associative research design. Data were collected through questionnaires distributed to 128 employees and analyzed using multiple linear regression.

Findings: The results indicate that competence has a positive and significant effect on employee performance. This suggests that higher levels of competence, including knowledge, skills, and work attitudes, enable employees to perform tasks more effectively, reduce errors, and enhance productivity. In addition, person–job fit also has a positive and significant effect on employee performance. This indicates that a higher level of alignment between individual abilities, interests, and job demands leads to greater work comfort, higher motivation, and more optimal performance. Simultaneously, competence and person–job fit contribute significantly to improving employee performance, which ultimately supports overall organizational performance.

The Influence of Adaptive Credit Line Optimization, Credit Risk Migration Containment Strategy, and Risk-Adjusted Selective Retention Strategy on Portfolio Yield Growth in Indonesian Online Fintech Lending Companies

2026-10-20T22:21:56+07:00

Research Objective: this study aims to analyze the effect of post-disbursement operational strategies, namely Adaptive Credit Line Optimization, Credit Risk Migration Containment Strategy, and Risk-Adjusted Selective Retention Strategy, on yield portfolio growth (Portfolio Yield Growth) among online lending companies in Indonesia.

Method: This study uses an explanatory quantitative approach with secondary aggregate monthly portfolio data from PT. X in Central Jakarta over the period January 2023 to December 2025 (N=36). The data were analyzed using multiple linear regression (Ordinary Least Squares, OLS) after classical assumption testing covering residual normality, multicollinearity, heteroscedasticity, and autocorrelation.

Research Results: the regression model was found to be fit for use, with an adjusted R-squared of 0.416 and an F value of 9.303 at a significance level of 0.000143, indicating that the three independent variables simultaneously had a significant effect on Portfolio Yield Growth. Partially, the three variables—Adaptive Credit Line Optimization (standardized beta 0.390; p=0.014), Risk-Adjusted Selective Retention Strategy (standardized beta 0.317; p=0.042), and Credit Risk Migration Containment Strategy (standardized beta 0.284; p=0.042)—were also proven to have a positive and significant effect.

Findings: the study shows that Adaptive Credit Line Optimization is the most dominant strategy, indicating that the flexibility of credit-limit adjustment based on customer behavior signals provides the largest contribution to yield growth compared to risk migration control or selective retention.

Conclusion: sustainable yield performance in online lending is determined not only at the origination stage, but also by the effectiveness of limit management, risk migration control, and risk-based selective retention in an integrated manner, so that companies are advised to integrate the three mechanisms into a single, responsive, and sustainable post-disbursement portfolio decision-making system.

Keywords: online lending, portfolio yield growth, adaptive credit line, roll rate, risk-based retention.

The Influence of Organizational Restructuring, Career Adaptability, and Leadership Style on Employee Job Satisfaction: Case Study : Maybank Indonesia Regional East Java, Bali, and Nusa Tenggara

2026-10-20T22:23:41+07:00

This study aims to examine the influence of organizational restructuring, career adaptability, and leadership style on employee job satisfaction at PT Bank Maybank Indonesia Tbk., Regional East Java, Bali, and Nusa Tenggara. The study was conducted in response to the increasing organizational transformation and digitalization within the banking industry, which require employees to adapt to structural changes while maintaining job satisfaction

The Effect of Transformational Leadership, Rewards, and Quality of Work Life on Employee Performance through Job Satisfaction at PT Bank Rakyat Indonesia (Persero) Tbk, Manukan Branch, Surabaya

2026-10-20T22:26:10+07:00

Purpose: This study aims to examine the effects of transformational leadership, rewards, and quality of work life on employee performance, both directly and indirectly through job satisfaction as a mediating variable, among employees of PT Bank Rakyat Indonesia (Persero) Tbk, Manukan Branch, Surabaya.

Design/methodology/approach: This study employs a quantitative approach with a causal research design. Primary data were collected from 50 employees using a five-point Likert scale questionnaire and a census sampling technique. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS, and bootstrapping was used to test the direct and indirect effects among the variables.

Findings: The results show that transformational leadership, rewards, and job satisfaction have positive and significant effects on employee performance, while quality of work life has a positive but not significant effect. Furthermore, job satisfaction fully mediates the relationship between quality of work life and employee performance, indicating that quality of work life improves employee performance indirectly through job satisfaction.

Research limitations/implications: The results should be interpreted cautiously because this study was restricted to a single bank branch . It is recommended that future research broaden the study's focus and include other factors, including employee engagement or organizational commitment.

Practical implications: In order to promote job satisfaction and boost employee performance, bank management is urged to strengthen the implementation of transformational leadership, assess the equity of reward systems, and enhance the work environment and work-life balance.

Originality/value: This study provides new empirical evidence demonstrating the role of job satisfaction as a full mediator in the relationship between quality of work life and employee performance in Indonesian state-owned banks, an aspect that remains underexplored in previous research within this sector.

Paper type: Research Paper

Competence and Retention Effects on Employee Performance through Organizational Commitment at PT SBCR

2026-10-20T22:27:11+07:00

High-stakes operational environments today place immense pressure on employee performance, making it a perennial headache for organizational leaders. While the industry often obsesses over sharpening technical competencies or tightening retention policies, the reality is that these factors don't automatically lead to better output. There is a "missing link" in this equation — a psychological bridge known as organizational commitment that dictates how talent actually turns into results. Our study dives into this dynamic, specifically investigating how commitment acts as a critical mediator between an employee's skills, their desire to stay, and their ultimate job performance.

By surveying a specific group of 179 employees through a saturated sampling method, we applied regression and mediation models to see what’s really happening on the ground. What we found is telling: competence and retention aren't just HR metrics; they are the primary fuel for building genuine organizational commitment. When employees feel deeply attached to their workplace, their performance naturally climbs. The data confirms that commitment isn't just a side effect — it is the mechanism that explains how personal ability and stability actually drive corporate success. Simply put, if you want better performance, you cannot just train or retain; you must win the heart of the employee through fostered commitment.

Research limitations/implications: Focuses only on competence, retention, and organizational commitment variables, providing opportunities for future research to explore additional factors influencing employee performance.

Practical implications: Study provide practical guidance for companies in improving employee performance through competency development, retention strategies, and strengthening organizational commitment.

Originality/value: Study offers empirical insight into the mediating role of organizational commitment in the relationship between competence, retention, and employee performance within the context of PT SBCR.

Paper type: Research Paper

Improving Customer Satisfaction and Loyalty Through Value Co-Creation, Customer Value, and Social Media Marketing Activities

2026-10-27T22:46:13+07:00

Objective: This research is intended to examine how value co-creation, customer value, and social media marketing activities affect customer satisfaction and how these factors subsequently relate to customer loyalty at Mitsubishi Motors Dealer Mitsubishi Mojokerto.

Design/Methodology/Approach: The study applies a quantitative causal-associative design by distributing a closed-ended questionnaire to customers of Mitsubishi Motors Dealer Mitsubishi Mojokerto. From a population of 186 customers, 65 respondents were selected using the Slovin formula. The data were processed with Partial Least Squares-Structural Equation Modeling (PLS-SEM) through SmartPLS to evaluate the measurement model, structural model, direct effects, and indirect effects by positioning customer satisfaction as the mediating variable.

Findings: The findings demonstrate that value co-creation contributes positively to customer satisfaction and customer loyalty. Customer value likewise shows a positive relationship with both customer satisfaction and loyalty. Social media marketing activities also have a positive effect on customer satisfaction and loyalty, particularly because informative, interactive, responsive, and relevant content supports the formation of customer experiences. Customer satisfaction is further proven to strengthen customer loyalty. The mediation analysis indicates that customer satisfaction mediates the effect of customer value and social media marketing activities on customer loyalty, while it does not mediate the relationship between value co-creation and customer loyalty.

Limitations: The scope of this study is restricted to customers of Mitsubishi Motors Dealer Mitsubishi Mojokerto and involves a relatively limited sample; therefore, the findings should be generalized with caution. Future studies are encouraged to broaden the research setting to other dealers, brands, or geographic areas and to include additional variables such as trust, customer engagement, brand image, relationship quality, or emotional attachment.

Research implications: Dealer management should reinforce customer value by improving service quality, ensuring price suitability, simplifying access, and delivering benefits that are relevant to customers. In addition, social media should be managed in a consistent, informative, responsive, and interactive manner to support higher customer satisfaction and loyalty.

Originality/value: The contribution of this study is reflected in the development of an automotive customer loyalty model that integrates social media marketing activities as a strategic element representing digital communication, customer interaction, responsiveness, and electronic word of mouth in shaping customer satisfaction and loyalty.

A Level 1 Cost Estimating Relationship Model for Airside Construction Cost Estimation of Greenfield Airports Without Intercept

2026-10-27T22:46:24+07:00

Cost estimation for greenfield airports in archipelagic countries such as Indonesia faces a distinctive problem: comparable projects are too few for multiple linear regression to be validly applied. This study develops and tests a Level 1 Cost Estimating Relationship (CER) in factor form without an intercept for the airside pavement components of greenfield airports. The model dissects unit cost into three core components, namely runway (including turning area), taxiway, and apron area, drawn from the budget documents of four benchmark greenfield airports. All costs are equalized to a Jakarta 2025 basis through double normalization of time and region, together with a standard scope rule that unifies the content of every budget item. Coefficients are calibrated with the Minimum Unbiased Percentage Error (MUPE) method, re-verified with the Zero-bias Minimum Percent Error (ZMPE) method, and validated through Leave-One-Out (LOO) cross-validation. The most important finding is that earthwork accounts for an average of 73.7% of airside cost across the four benchmark airports and is governed by site class rather than pavement area. The resulting model is Y = (1.1001 X1 + 0.9227 X2 + 1.2825 X3) x M(s) x (IKKp / 113.17) x (IHPBp / 101.39), where LOO validation on the core-pavement-and-ancillary cost yields a prediction error of 34.9% and a bias of +10.5%, equivalent to AACE Class 4-5 accuracy. According to ISPA, GAO, and NASA guidance this accuracy is acceptable for master-planning-stage estimates and is categorized as marginal to good.

Digital Transformation in the Construction Industry

2026-10-27T22:46:35+07:00

Digital transformation is reshaping the construction industry not merely through the adoption of new tools, but through fundamental changes in the ways information is produced, decisions are made, risks are allocated, contractual relationships are administered, and legal accountability is determined. Building Information Modeling, Common Data Environments, the Internet of Things, cloud computing, data analytics, digital twins, automation, and Artificial Intelligence create substantial opportunities to improve productivity, transparency, collaboration, safety, and the early identification of project risks. At the same time, digitalization generates new challenges concerning data quality and ownership, interoperability, cybersecurity, competency gaps, technological dependency, AI-assisted decision-making, contractual uncertainty, and professional accountability. This paper proposes Smart Construction Governance as an expanded construction-management paradigm that integrates people, processes, technology, contracts, risk, data, governance, ethics, sustainability, and dispute avoidance. From a construction law perspective, digitalization does not diminish the role of the contract as the foundation of rights, obligations, risk allocation, and accountability. Instead, it requires more disciplined, transparent, and traceable contract administration. Digital technologies may also strengthen contemporaneous records, early-warning mechanisms, and dispute avoidance. The paper argues that the essential transformation is not simply a movement from manual to digital practices, but a transition from technology adoption toward intelligent and responsible governance that remains grounded in human judgment, legal certainty, ethical responsibility, trust, and long-term value creation.