Construction Company Insolvencies: State-of-the-Art Review

The surging tendency of insolvencies has emerged as a contemporary issue in the global construction industry. Moreover, these insolvencies have led to project failures, financial losses, and reputational damage within the construction industry. Despite the severity of the issue, there is a lack of research dedicated to introducing practical solutions to mitigate insolvencies. Accordingly, this research aims to pioneer a research direction to find practical and real-world methods to reduce insolvencies. To achieve this, the research combined a bibliometric analysis with a systematic literature review to map current research trends and systematically categorize insolvency factors into themes. Findings reveal that the current research is focused on developing financial ratios to predict insolvencies, undermining the exploration of qualitative factors. Furthermore, the study identified industry-specific, organizational, and costing-related themes as the main insolvency factor. This categorization enables future researchers to effectively identify the potential factors that can be addressed to mitigate insolvencies. Another key finding was the low attention past researchers have given to conducting research on insolvencies caused by poor costing practices, an area a construction practitioner can directly control. Accordingly, this research encourages future research to develop practical solutions to reduce insolvencies stemming from cost mismanagement. Through these findings, this research lays the groundwork for a sustainable and practical approach to mitigate construction insolvencies.