Internationalization of construction contracting firms : an empirical evidence from Pakistan | |
| Author | Maqsoom, Ahsen |
| Call Number | AIT Diss. no.CM-14-02 |
| Subject(s) | Construction industry--Pakistan Construction contracts--Pakistan |
| Note | A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Construction Engineering and Infrastructure Management, School of Engineering and Technology |
| Publisher | Asian Institute of Technology |
| Abstract | The free trade agenda under the auspices of World Trade Organization (WTO) has urged many construction firms in the developing economies to re-orient their business strategies, thus pushing them to internationalize and counter the intense competition at domestic and regional markets. If they choose to do so, these firms however, become exposed to newer challenges associated with working in new territories and ever competitive markets. The aim of this study is to examine the internationalization of construction contracting firms (CCFs) from Pakistan and to analyze the significant factors that enabled them to be competitive internationally. Using an integrated approach, this study aims to test whether the theories of internationalization are applicable in the context of construction contracting firms. Additionally, this study examines the difference in the factors driving the internationalization of CCFs vis-à-vis firm size and international experience. This study uses mixed method (triangulation)approach in order to collect and analyze the data. The questionnaire was mailed to the 126 firms in total. Overall 87 responses were received; three responses were discarded as they were incomplete, leaving 84 complete responses, a 66.7% response rate. Those who responded included executives such as CEO, Directors, General Managers, Heads of Business Development and Operations and Managers responsible for Business Development. Beside this, five case studies were conducted through one-on-one interviews with the top management (executives) and technical staff of the CCFs, which allowed the researchers to have a holistic view of the internationalization of the CCFs and prove deeper into content not easily available in questionnaire survey. This study supports the Eclectic paradigm as an adequate theoretical foundation which sufficiently explains firm internationalization. Yet, the sole existence of these advantages advanced by Dunning was not sufficient for CCFs to internationalize. For the reason that all four theoretical conceptualizations have relevance for internationalization of CCFs, it is argued that integrated approaches to the research of internationalization are not only advantageous but also vital to the understanding of the complications of the processes and matters faced by managers in the international firms. Regarding firm size and international experience, it is investigated that construction contracting firms provide empirical support for a selected theoretical models. This is for Eclectic paradigm and Network Approach in relation to firm-specific competitive advantages and Eclectic paradigm and Diamond model in relation to home-country specific competitive advantages of the large construction firms. On the other hand, young construction firms provide greater credence to International Entrepreneurship construct for top management roles in internationalization, and Eclectic paradigm, Stage theory and Diamond model in relation to home country-specific competitive advantages and locational advantages. The results of the study show that Pakistani CCFs are more influenced by the internal motives rather than external motives. Top management was found to be the change agents and key drivers for internationalization. Pakistani CCFs are helped mostly by their firm generated competitive advantages and partially by home country generated competitive advantages. Pakistani CCFs evaluate a wide range of locational factors before making the decision to enter the foreign markets. It is found that the theories of internationalization taken in this study are applicable to Pakistani CCFs, but role and support of government lacked in directing the location and pace of their internationalization. This study retracts the argument that in developing countries, the role of government to be important in dictating the pace and extent of firm internationalization as the investigated Pakistani CCFs lacked in it. Therefore, Home Country Specific Advantages based on lack of government and political support was found as indirect determinant for Pakistani CCFs internationalization. This thesis argues that it is the managerial decision makers that are central to the internationalization of firms. Further, this study provides a novel insight on CCFs’ internationalization by showing how firms’ varied size and diverse international experience are associated with motives, management characteristics, firm specific competitive advantages, home country specific competitive advantages and locational advantages that enable firms to internationalize. The findings of the study show that CCFs of varied sizes did not concur over few management characteristics and several firm-specific and home country-specific competitive advantages; whereas CCFs of varied international experiences were in disagreement over fewer motives and home country-specific competitive advantages, and several locational factors. Small CCFs need to overcome their management and firm-specific limitations. Government and home country support are needed to promote internationalization of Pakistani’ CCFs, especially, younger and smaller ones that are more vulnerable due to an unstable business environment and lack of opportunities in domestic markets. Young firms may overcome locational factors by partnering and engaging local people in the foreign projects. Finally, policy makers at government level in emerging economies need to take account of these findings. Policy makers should be aware that if the government incentives are enhanced, it is likely that the number of Pakistani CCFs venturing abroad would augment significantly. |
| Year | 2014 |
| Type | Dissertation |
| School | School of Engineering and Technology (SET) |
| Department | Department of Civil and Infrastucture Engineering (DCIE) |
| Academic Program/FoS | Construction Engineering and Infrastructure Management (CM) |
| Chairperson(s) | Chotchai Charoenngam; |
| Examination Committee(s) | Hadikusumo, B. H. W.;Anwar, Naveed;Zou, Patrick X.W.; |
| Scholarship Donor(s) | Higher Education Commission (HEC), Pakistan; |
| Degree | Thesis (Ph.D.) - Asian Institute of Technology, 2014 |