PhD candidate: Puying Li Supervisors: Professor Ali Parsa 24th ERES Annual Conference The international competitiveness of Chinese construction firms PhD candidate: Puying Li Supervisors: Professor Ali Parsa Professor Anil kashyap Dr. Simon Huston Centre for Real Estate

Contexts Global construction market: The construction sector plays is an important role in economic development in many country (Crosthwaite 2000). Key changes in global construction market: tender conditions, project types, emerging markets and corporate management etc (Mahalingam et al. 2005; Han et al. 2010). Key players have changed, 36 European, 18 American, 16 Japanese and 13 Chinese firms are key players ranked in the top 100 global construction firms in 2004. However, 25 European, 8 American, 8 Japanese and 21 Chinese firms ranked in the top 100 in 2015 (Engineering News Record 2004-2014). Chinese construction market: China’s construction industry is rapid transition from a centrally-planned economy to a socialist market economy, the role of the construction industry has been vital to the social-economic development (Lu 2006). The Chinese government which has been supporting overseas projects since the 1950s is currently strengthening overseas infrastructure construction under the ‘The Silk Road Economic Belt’ policy from 2013 (NDRC et al. 2015). The competitiveness frameworks on firm’s level The competitiveness frameworks (e.g. Porter1980; Buckley et al. 1988) on secondary literature review which may not always necessarily be applicable in actual operations at the level of individual construction companies. Competitiveness theory (e.g. Schumpeter, J. 1942; Feurer, R and K. Chaharbaghi 1994) still is a vague concept within the construction industry. How presentation will benefit audience: Adult learners are more interested in a subject if they know how or why it is important to them. Presenter’s level of expertise in the subject: Briefly state your credentials in this area, or explain why participants should listen to you.

Research Aim The aim of this research is to investigate key indicators influencing the competitiveness of Chinese Construction Firms (CCFs) in the global market. Lesson descriptions should be brief.

Research Objectives and Questions Research questions 1. Systematically review theories and concepts of competitiveness, define international competitiveness and how it is achieved. 1. What is competitiveness and how can its dimensions be measured? 2. To identify the key competitiveness indicators (KCIs) of global construction companies. 2. What are the current issues for Chinese construction firms’ in the context of their entry into international markets and what might constitute a comprehensive answer to them? 3. To posit a draft conceptual framework of the key competitiveness indicators. 3. Can the characteristics of successful and unsuccessful global construction firms be identified and measured? 4. To validate of the conceptual framework by comparing the local operational environments in China and the international markets. 4. Can an operational framework for construction firm competitiveness be constructed? 5. To apply the competitiveness framework to the operations of Chinese Construction Firms. 5. How competitive are Chinese construction firms? Example objectives At the end of this lesson, you will be able to: Save files to the team Web server. Move files to different locations on the team Web server. Share files on the team Web server.

Research Approaches: Deductive and Inductive Conceptual phase(chapters 1-4) Competitiveness theory; The global and China's construction market; CCFs' development KCIs of top construction firms. Deductive Exploratory phase (chapters 5-6) Analysis of CCFs' KCIs by interview data Inductive Operational phase (chapters 7-8) A mathematical methods for calculating competitiveness framework validation by case study Reflexive phase (chapter 9) conclusions and recommendations

Research Methodology and Strategy: Mix method and Sequential Explanatory Strategy Secondary quantitative data collection and analysis Literature review of top global construction firms rankings over last decade Secondary qualitative data collection and analysis Literature review of competitiveness theory and KCIs regarding to top global construction firms' successful operations Primary quantitative and qualitative data collection Interviews with the Modified-Delphi method Primary quantitative data analysis KCI’s important degree Integration of both quantitative and qualitative data 1) Primary qualitative data analysis: analysis of respondent’s answers 2) case study 3) conclusion of findings and recommendation

Research Sample: Key players in the global construction market 182 firms have ranked in the top 100 over the last decade 155 international (non-Chinese) construction firms 60 international construction (non-Chinese) firms operating in the UK 27 Chinese construction firms

Key Competitiveness Indicators (emerging from literature)

Organizational Capabilities Financial Capabilities Conceptual Framework Construction Firm's Competitiveness Indicators Corporate Strategies Quality Build safety and healthy environment Social responsibility High productivity Risk management Research and development Information technology Organizational Capabilities Organisation management Technology management Corporate experience Communication and corporation Corporate culture Corporate reputation Employee management Financial Capabilities Costs Value-added for stakeholders assets Revenue Source finance Liability Profit

Primary Data collection: Interview by Modified-Delphi method Before interviews Questionnaire designed by conceptual framework Interview invitation letter send to Chinese construction firms and industry experts and confirmation of the number of experts agreeing to participate First round of interviews Interview with participants Answers analysed Restart interview if participants’ consensus not achieved Second round of interviews Interview until participants’ consensus achieved Conclusion of interview finding

Selection of Interview Participants This study selects its sample of Chinese construction industry experts based on the following criteria planned to correctly identify eligible participants for the Delphi interview: Participants must have rich working experience in the construction industries; Participants must be currently, recently or directly involved in construction management in international markets; Participants must have detailed knowledge of the international construction firms’ management options.

Samples of Interviewees

Questionnaire Design Quantitative analysis: The rating score of each indicators must achieve these requirements, otherwise, the indicators will be removed from conceptual framework Median score of ≥4.0 Mean score of ≥3.0 The interquartile range (IQR) ≤1.0 The standard deviation (SD) ≤ 1.0 Interview finishing measure: the Kendall’s W coefficient≥0.5 (a measure of the agreement among several(m) judges who are assessing a given set of (n) objects). Qualitative analysis: analysis of respondents’ answers In your view, what are the current issues affecting international and Chinese construction firms’ entry into the overseas market? In your view, how do you evaluate if a construction firm is successful or unsuccessful in the international market? In your view, how do top international and Chinese construction firms operate successfully in the changing global market?

Analysis of First Round of Interviews: KCIs’ important degree rating However, Kendall’s W=0.208 indicated that the level of agreement among these interviewees was weak. This required carrying out a second round of interviews to achieve agreement.

Analysis of First Round of Interviews: Additional KCIs which participants proposed 1. KCI-22 The ability of information acquisition 17. KCI-38 The training and welfare of expatriate personnel 2. KCI-23 China’s political influence 18. KCI-39 Contract management 3. KCI-24 The relationship between China and other countries 19. KCI-40 Information management 4. KCI-25 Nation’s protectionism 20. KCI-41 Considerations of claims on the project 5. KCI-26 Safety management 21. KCI-42 The knowledge of the project countries’ accounting and tax system 6. KCI-27 The financing methods 22. KCI-43 Employees’ quality 7. KCI-28 Biding price 23. KCI-44 Employee localization 8. KCI-29 Costs control 24. KCI-45 Company’s qualification 9. KCI-30 Project warranty 25. KCI-46 The strategy of bidding and the types of payment 10. KCI-31 The nation’s policy 26. KCI-47 The political environment of project countries 11. KCI-32 The level of internationalization 27. KCI-48 Agility/adaptability/responses 12. KCI-33 The capability of understanding the international construction market 28. KCI-49 Management change 13. KCI-34 The guarantee of project quality 29. KCI-50 Regulation and legal framework 14. KCI-35 The ability of applying advanced technologies 30. KCI-51 Understand local values and idiosyncrasies 15. KCI-36 The guiding of the construction technology to the preliminary construction scheme 31. KCI-52 Corporate knowledge 16. KCI-37 Leadership 32. KCI-53 Brand

Analysis of Second Round of Interviews: KCIs’ important degree re-rating Maximum Minimum Mean Median IQR SD Total value KCI-1. Project quality 5 4 4.938 0.246 158 KCI-3.Build safety and healthy environment 4.901 0.296 157 KCI-4.Social responsibility 1 3.906 0.641 125 KCI-7.Communication and cooperation 3 4.063 0.435 130 KCI-9.Corporate culture 4.031 0.309 129 KCI-10.High productivity 4.250 0.75 0.440 136 KCI-11.Valued-added for stakeholders 2 0.530 KCI-12. Reputation 4.844 0.369 155 KCI-2.Orgarnazation management 4.813 0.397 154 KCI-5. Technology management 4.719 0.523 151 KCI-6. Corporate experience 3.969 127 KCI-14. Employee management 0.538 KCI-16.Risk management 4.094 131 KCI-17.Research and Development 4.156 0.448 133 KCI-21.Information technology 0.400 KCI-8.Costs 4.125 0.421 132 KCI-13.Assets 4.000 128 KCI-15.Revenue KCI-18.Source of finance KCI-19. Liability 3.406 0.499 109 KCI-20.Profit 4.219 0.420 135 The Kendall’s W=0.531 > 0.500, so the 21 KCIs’ ratings could be concluded. But, liability’s median score = 3 less than 4, thus, liability must be removed from the key competitiveness indicators list.

Comparison of KCIs Rankings in the Literature Cited and in the Interview Results Secondary literature review results Interview results 1 KCI-1 Project quality KCI-1 project quality 2 KCI-2 Organization management KCI-3 Build safety and healthy environment 3 KCI-12 Reputation 4 KCI-4 Social responsibility KCI-2.Orgarnazation management 5 KCI-5 Technology management KCI-5. Technology management 6 KCI-6 Corporate experience KCI-9 High productivity 7 KCI-7 Communication and cooperation KCI-20 Profit 8 KCI-8 Costs KCI-17 Research and Development 9 10 KCI-10 Corporate culture KCI-16 Risk management 11 KCI-11 Value-added for stakeholders 12 KCI-11 Corporate culture 13 KCI-13 Assets KCI-15 Revenue 14 KCI-14 Employee management 15 16 17 KCI-17 Research and development KCI-21 Information technology 18 KCI-18 Source of finance 19 KCI-19 Liability KCI-11 Valued-added for stakeholders 20 21  

Analysis of Second Round of Interviews: additional KCIs’ important degree rating Max Min Mean Median IQR SD Total value KCI-22.The ability of information acquisition 5 4 4.219 0.420 135 KCI-23.China’s political influence 2 4.031 0.595 129 KCI-24. The relationship between China and other countries 3 4.125 0.421 132 KCI-25. Nation’s protectionism 3.281 1 0.581 105 KCI-26.Safety management 4.719 0.75 0.523 151 KCI-27. The financing methods 4.094 0.466 131 KCI-28. Bidding price 4.781 153 KCI-29. Cost control 4.188 0.397 134 KCI-30. Project warranty 0.336 KCI-31. The nation’s policy 4.093 0.296 KCI-32. The level of internationalization KCI-33. The capability of understanding the international construction market 4.813 154 KCI-34. Quality assurance KCI-35. The ability of applying advanced technologies KCI-36. The guiding of the construction technology to the preliminary construction scheme 4.750 0.508 152 KCI-37. Leadership 4.250 136 KCI-38. The training and welfare of expatriate personnel 4.000 128 KCI-39. Contract management 4.875 156 KCI-40. Information management KCI-41. consideration of claims on the project 3.219 0.608 103 KCI-42. The knowledge of the project countries’ accounting and tax systems 0.440 KCI-43. Employees’ quality KCI-44. Employee localization 0.360 KCI-45. Company’s qualification 3.250 0.672 104 KCI-46. The strategy of bidding 0.622 KCI-47. The political environment of project countries 3.969 0.474 127 KCI-48.Agility/adaptability/responses 0.538 KCI-49. Management change 0.634 KCI-50. Regulation and legal framework 0.400 KCI-51. Understanding of local values and idiosyncrasies 0.695 KCI-52. Corporate knowledge 4.313 0.471 138 KCI-53. Brand 4.844 0.369 155 The Kendall’s W of additional KCIs=0.509 > 0.500, thus, the additional KCIs rating could be concluded. However, 3 out of 32 KCIs did not achieve consensus, they must be removed from the key competitiveness indicators list

KCIs’ Rankings by Their Mean Scores SD Total value 1 KCI-1 Project quality 4.938 0.246 158 2 KCI-3 Build safety and healthy environment 4.901 0.296 157 3 KCI-39 Contract management 4.875 0.336 156 4 KCI-12 Reputation 4.844 0.369 155 5 KCI-53 Brand 6 KCI-2 Organizational management 4.813 0.397 154 7 KCI-33 The capability of understanding the international construction market 8 KCI-35 The ability of applying advanced technologies 9 KCI-28 Bidding price 4.781 0.420 153 10 KCI-34 Quality assurance 11 KCI-36 The guiding of the construction technology to the preliminary construction scheme 4.750 0.508 152 12 KCI-46 The strategy of bidding 0.622 13 KCI-5 Technology management 4.719 0.523 151 14 KCI-26 Safety management 15 KCI-49 Management change 0.634 16 KCI-52 Corporate knowledge 4.313 0.471 138 17 KCI-10 High productivity 4.250 0.440 136 18 KCI-37 Leadership 19 KCI-20 Profit 4.219 135 20 KCI-22 The ability of information acquisition 21 KCI-40 Information management 22 KCI-29 Cost control 4.188 134 23 KCI-43 Employees’ quality 24 KCI-17 Research and Development 4.156 0.448 133 25 KCI-30 Project warranty 4.125 132 26 KCI-8 Costs 0.421 27 KCI-24 The relationship between China and other countries 28 KCI-16 Risk management 4.094 131 29 KCI-27 The financing methods 0.466 30 KCI-32 The level of internationalization 31 KCI-31 The nation’s policy 4.093 32 KCI-7 Communication and cooperation 4.063 0.435 130 33 KCI-9 Corporate culture 4.031 0.309 129 34 KCI-15 Revenue 0.400 35 KCI-14 Employee management 0.538 36 KCI-48 Agility/adaptability/responses 37 KCI-23 China’s political influence 0.595 38 KCI-51 Understand local values and idiosyncrasies 0.695 39 KCI-44 Employee localization 4.000 0.360 128 40 KCI-13 Assets 41 KCI-42 The knowledge of the project countries’ accounting and tax system 42 KCI-38 The training and welfare of expatriate personnel 43 KCI-6 Corporate experience 3.969 127 44 KCI-21 Information technology 45 KCI-18 Source of finance 46 KCI-50 Regulation and legal framework 47 KCI-47 The political environment of project countries 0.474 48 KCI-11 Valued-added for stakeholders 3.906 0.530 125 49 KCI-4 Social responsibility 0.641

Refining Conceptual Competitiveness Framework

Preliminary results Research objective 1 have been achieve by critical literature reviews in order to understanding competitiveness theory and frameworks. However, these theories are not suitable for improving construction firms’ competitiveness. Research objective 2 have been achieved by identifying Key Competitiveness Indicators (KCIs) from literature reviews, total 21 KCIs are identified and a conceptual competitiveness framework was established based on these KCIs Research objective 3 have been achieved by Modified-Delphi interviews, Total 49 KCIs were remained as KCIs and the conceptual competitiveness framework was refined.

Next Research steps A mathematical methods for calculating competitiveness: Weighted Summation (on-going) Validate competitiveness framework by case study (on-going) Conclusions of principle findings Reflections of research limitations

Reference Buckley, P. J., Pass, C. L. and Prescott, K. (1988). Measures of international competitiveness: A critical survey. Journal of Marketing Management. 4(2): 175-200. Crosthwaite, D. (2000). The global construction market: a cross-sectional analysis. Construction Management and Economics. 18: 619-627 Engineering News Record (2004-2014). The top 250 international contractors. Feurer, R. and Chaharbaghi, K. (1994). Defining competitiveness: a holistic approach. Management Decision. 32(2): 49-58. Han, S., Kim, D. Y., Yang, H. S. and Choi, S. (2010). Strategies for contractors to sustain growth in the global construction market. Habitat International. 34(1): 1-10. Lu, W. (2006). A system for assessing and communicating contractor's competitiveness. The Hong Kong Polytechnic University. Mahalingam, A. and Levitt, R. E. (2005). Understanding and mitigating challenges on global projects: the role of the freelance expatriate. The ASCE Construction Research Congress. The National Development and Reform Commission of China, Ministry of Foreign Affairs of China, and Ministry of Commerce of China (2015) Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road. Porter, M. (1980). Competitive strategy. The Free Press. Schumpeter, J. (1942). Capitalism, Socialism and Democracy.

Articles and Presentations Book chapter: 1. Contributing a chapter on construction firms’ competitiveness to a forthcoming Routledge Book on Sustainable Urban Regeneration. Conference papers: Li, P., Parsa, A., Huston S., Kashyap, A. and Kempton, J. The international competitiveness of Chinese construction firms: A Delphi study. Conference details: European Real Estate Society 23nd Annual conference, 8-11th June, 2016; Regensburg, Germany Li, P., Parsa, A., Huston S., and Kashyap, A. The international competitiveness of Chinese construction firms. Conference details: European Real Estate Society 22nd Annual conference, 24-27th June, 2015; Istanbul, Turkey Presentations: 2016 European Real Estate Society 23rd Annual conference. Topic: The international competitiveness of Chinese construction firms—a modified-Delphi study. 08/06/2016, Regensburg, Germany. 2016 Royal Agricultural University researchers’ seminar. Topic: Research the international competitiveness of Chinese construction firms with Delphi method. 16/01/2016, Cirencester, UK. 2015 European Regional Society Association and European Real Estate Society summer school. Topic: The international competitiveness of Chinese construction firms. Vienna University of Economics and Business. 13/07/2015, Vienna, Austria. 2015 European Real Estate Society 22nd Annual conference. Topic: The international competitiveness of Chinese construction firms. 25/06/2015, Istanbul, Turkey

Thank you for your attend Email: puying.li@student.rau.ac.uk Centre for Real Estate