The rapidly increased development of gated communities recently attracts many academic interests. This paper is the first research attempt to investigate the application of Homeowners Associations (HOA’s) on industrial land use in comparison to traditional government administration. This comparison, which applies the transaction cost theory and polynomial regression analysis, reveals that HOA’s are superior to conventional government administration in terms of transaction costs and overall efficiency. The results provided through analysis of Taiwan’s commonhold industrial park development of the Nankang Software Park (NKSP) indicate that NKSP’s HOA is institutionally superior to traditional government administration. In addition the results imply that HOA’s are more appropriately applied to industrial rather than residential land use. The whole concept developed here can be applied to the industry of pressure vessels and piping for efficiency promotion.

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