Factors Formulating the Competitiveness of the Chinese Construction Industry: Empirical Investigation

Abstract

The competitiveness of the construction industry is significantly affected by various factors, such as abundant manpower, integrated performance of supporting industries, and government support. The construction industry in developing countries is less competitive than its counterparts in the international construction market, and causes of this situation are multifaceted. Nation-related characteristics should be taken into account to produce competitive strategies for a specific construction industry, and this also leads to the situation that factors differ between countries, especially between developing and developed countries. Porter’s diamond model is adopted to develop potential factors formulating the competitiveness of the construction industry, and 34 factors are identified within the Chinese constriction industry (CCI). In order to get empirical findings, a questionnaire survey is managed to investigate the significance of these factors, and factor analysis is also applied. Factor analysis further reveals six underlying factors: stable home market (F-I), supply chain management (F-II), corporate management practices (F-III), qualified professionals (F-IV), satisfactory business environment (F-V), and migrant workers (F-VI). The study provides insights in finding key areas that formulate the competitiveness of the CCI, as well as valuable implications for other countries. These research results provide some practical implications for practiced professionals and policy-makers to emphasize these critical aspects that determine the competitiveness of the industry, e.g., creating a dynamic and advanced domestic market. However, as the market context and institutional environment vary significantly among different countries, similar studies in different construction industries would enrich the understanding of the competitiveness of the construction industry generally.