Investigating Political Risk Paths in International High-Speed Railway Projects: The Case of Chinese International Contractors

Tengyuan Chang, Xiaopeng Deng and Bon-Gang Hwang
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Tengyuan Chang: School of Civil Engineering, Southeast University, Jiangning District, Nanjing 211189, China
Xiaopeng Deng: School of Civil Engineering, Southeast University, Jiangning District, Nanjing 211189, China
Bon-Gang Hwang: School of Design and Environment, National University of Singapore, 4 Architecture Drive, Singapore 117566, Singapore

Sustainability, 2019, vol. 11, issue 15, 1-15

Abstract: Contracting in international high-speed railway (HSR) projects is a risky business. The success of these projects and the sustainable development of international contractors are inseparable from effective risk management. However, limited research has been conducted to investigate the political risk involved in international HSR projects. As HSR development is becoming a more major part of the global construction market, this paper investigates the political risk factors specific to the projects and the relationships among the factors. Through a literature review and a pilot interview conducted with five Chinese professionals, 26 political risk factors were proposed. A questionnaire was then administered to 112 experts from both academia and industry to assess the significance of the factors. By applying partial least-squares structural equation modeling (PLS-SEM) technology, the 26 factors were clustered into eight groups, and 10 significant risk paths were identified. Specifically, “government attitudes” can directly influence the “investment profile” and “social support” can directly influence “government attitudes,” while “government instability,” “economic climate,” “financing and costs,” “external interference,” and “contractors’ operations” can indirectly influence investment profile by directly influencing “government attitudes” or “social support.” The findings of this study can assist international contractors with gaining a clear understanding of the political risk involved in international HSR projects, which will lead to more effective political risk management as well as better business decisions. Furthermore, this paper will contribute to the global body of knowledge in the area of political risk management for large-scale international projects.

Keywords: international contractors; political risk; large-scale projects; risk management; construction management (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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