High uncertainty in construction projects boosts trust-based governance over formal contracts.
Asset specificity in construction projects affects how owners and contractors work together. The level of uncertainty in a project can change how they manage their relationship. A study looked at how different types of governance, like contracts and trust, are used in these situations. They found that when uncertainty is high, trust is more important than formal contracts for resolving issues related to asset specificity. This research helps us understand how construction projects are managed and how relationships between owners and contractors can be improved.