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

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.

What Hinders the Development of Green Building? An Investigation of China

“…The first step was to conduct a CFA. After checking the reliability and validity of the measurement model, path analysis was conducted to evaluate the relations among the eight factors’ groupings [58]. The CFA can detect relationship between measurement items and their structures [59].…”

Determinants for Coopetition Strategies of International Joint Ventures in High-Speed Railway Projects

“…Notes: ***significance level = 1%; **significance level = 5%; *significance level = 10% Indicated hypothesis path supported Indicated hypothesis path not supported international contractors, such as the China Export and Import Bank provided export credit support for overseas projects undertaken by Chinese contractors (Zhao & Shen, 2008) so that such macro-policy support to enhance the capability of the firm. Second, the economic complexity, political complexity and cultural differences faced by international HSR projects make them more difficult to manage than domestic projects because they involve more risks and are more difficult to predict (Chang et al, 2019), so improving project management capability is a necessary way to ensure the success of coopetition strategies. The IJVs bring together the members of the IJVs in the form of the project department.…”

A Comprehensive Assessment Approach for Water-Soil Environmental Risk during Railway Construction in Ecological Fragile Region Based on AHP and MEA

“…Based on the rating criteria in Table 10, the classic domain R i (u i ) and joint domain R p (u i ) of risk categories can be determined. Results of risk of design scheme (u 1 ), construction method (u 2 ), materials and equipment (u 3 ), construction management (u 4 ), and personnel competency (u 5 ) were presented in Equations 16- (20) respectively. According to experts' evaluation of each WSER of the MG subproject, the evaluated ME R(u i ) can be generated (see Equation 21).…”

“…Although no existing studies specifically focus on WSER assessment during railway construction, previous literature can identify many quantitative methods in railway construction risk analyses that can provide a methods pool for establishing quantitative methods of this study, such as analytic hierarchy process (AHP), experts' judgment, Monte Carlo (MC) simulation, fuzzy mathematics, machine learning (ML), structural equation model (SEM), etc. [20][21][22][23][24]. For instance, Cho et al [22] established a probabilistic assessment for prestressed concrete box girder railway bridges by applying AHP; Macciotta et al [23] applied MC simulation to determine the probability distribution of the estimated risks; Leśniak and Janowiec [25] evaluated the railway construction investments' risk of additional works using Bayes network; Chang et al [20] employed SEM to examine the political risk paths in international high-speed railway projects.…”

“…[20][21][22][23][24]. For instance, Cho et al [22] established a probabilistic assessment for prestressed concrete box girder railway bridges by applying AHP; Macciotta et al [23] applied MC simulation to determine the probability distribution of the estimated risks; Leśniak and Janowiec [25] evaluated the railway construction investments' risk of additional works using Bayes network; Chang et al [20] employed SEM to examine the political risk paths in international high-speed railway projects. MC simulation can be a useful method to determine the occurrence possibility of a risk by taking randomness into consideration, but the realistic occurrence probability of a risk can be difficult to determine, which the evaluation errors.…”