INFORMATION ASYMMETRIES AND TECHNOLOGICAL INNOVATION IN LARGE ENGINEERING CONSTRUCTION PROJECTS

Research on technological innovation shows that information asymmetrie s between suppliers and buyers constitute a major barrier to the succe ssful introduction of new products. Most of this research, however, pu ts the burden of overcoming these asymmetries on producers of new prod ucts. In the case of large engineering construction projects innovatio n is often the result of joint problem solving by owners, prime contra ctors, consultants, and equipment suppliers. In this paper we examine the relationship between innovativeness of large engineering construct ion projects and internal owner capabilities, degree of control over p roject, and dependence on external organizations. We use data on power plant construction projects to test hypotheses derived from agency an d organization theories of innovation. Our results indicate that organ ization theories of innovation are on the whole better predictors of t he impact on innovativeness of owner's capabilities and relationship t o external organizations.