Identifying micro variables contributing to political risks in international construction projects
Engineering, Construction and Architectural Management
ISSN: 0969-9988
Article publication date: 16 April 2018
Abstract
Purpose
The purpose of this paper is to explore the micro-level variables contributing to political risks in international construction projects.
Design/methodology/approach
A total of 25 micro-level variables were identified from the literature review, and a questionnaire survey was performed with 138 professionals from both academia and industry. Then, the Spearman rank correlation was used to test whether there was agreement on ranking between the two respondent groups. Furthermore, the 25 variables were grouped into six underlying factors through the exploratory factor analysis.
Findings
The results indicated that the most critical variables were “project desirability to the host country,” “relationship with governments,” “misconduct of contractors,” “public opposition to the project,” “experiential knowledge of political risks” and “advantageous conditions of contract.” In addition, the opinions within each group were consistent and there was no significant disagreement on the rankings of variables between academics and practitioners. However, the academic and practitioner groups held different opinions on some individual variables. The impact direction of the variables was associated with confusion among the respondents.
Originality/value
The findings presented in this paper can help international construction enterprises effectively manage political risks in international construction projects.
Keywords
Acknowledgements
The authors would like to thank the respondents from both the industry and academia who have contributed by completing the survey questionnaires used in our study of political risk management in international construction projects. This research study is funded by the “National Natural Science Foundation of China” (NSFC-71372199) and the “Postgraduate Research and Practice Innovation Program of Jiangsu Province, China” (KYCX17-0191) which the authors gratefully acknowledged.
Citation
Deng, X., Low, S.P., Zhao, X. and Chang, T. (2018), "Identifying micro variables contributing to political risks in international construction projects", Engineering, Construction and Architectural Management, Vol. 25 No. 3, pp. 317-334. https://doi.org/10.1108/ECAM-02-2017-0042
Publisher
:Emerald Publishing Limited
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