Wang, D (2004) The Chinese construction industry from the perspective of industrial organization. PhD thesis, Northwestern University, USA.
Abstract
The Chinese construction industry has been growing rapidly since China launched a reform of its national economic system from a centrally planned economy to a socialist market economy in 1978. Nevertheless, its development over the past decade or so suggests that it faces serious difficulties during its transition to a market-oriented system. In particular, the profit rate for the industry is lower than that of typical market economies and continues to decline. Meanwhile, the percentage of unprofitable firms has been growing since the early 1990s. The primary objectives of this study are to identify options for improving the development of the Chinese construction industry by means of an analysis based on industrial organization theory. This research investigates the market structure of the Chinese construction industry in terms of concentration ratios, the Herfindahl index, firm size distribution by employment, the Lorenz Curve, and the associated Gini coefficient; and the results for Chinese contractors are compared with those for contractors in the US, the UK, and Japan. A questionnaire survey and personal interviews were conducted in major cities in China to investigate the primary objectives of various Chinese construction firms and the strategic behavior that they have adopted to achieve the stated objectives during this dynamic transformational period, with particular attention being given to profit strategy, project procurement strategy, pricing strategy, factors for winning a bid, competition method, factors affecting project management, growth strategy, and unfair competitive activities. The performance of the Chinese construction industry is analyzed by means of indicators that measure productivity, profitability, quality of construction product, and technological advances. The important factors contributing to the industry's poor performance were found to be (a) inappropriate market structure, (b) problems with internal firm operations, and (c) unfair competition. To address these problems and improve the competitiveness and effectiveness of the Chinese construction industry, both nationally and internationally, a variety of policies is suggested, and each of these suggestions is supported by proposed actions for implementation by either the government or the industry itself.
| Item Type: | Thesis (Doctoral) |
|---|---|
| Thesis advisor: | Krizek, R J |
| Uncontrolled Keywords: | competition; competitiveness; market; industrial organization; organization theory; construction firms; employment; government; pricing; China; Japan; UK; productivity; questionnaire survey; interview |
| Index terms: | pricing, productivity, employment, competitiveness, effectiveness, profitability, construction industry, implementation, project management, option, interview, industrial organization, face, strategy, profit, Japan, construction firm, survey, questionnaire, competition, China, project procurement, construction product |
| Subjects: | decision analysis, market analysis, industry analysis, performance management, management, project management theory and practice, Geography, psychology, economic analysis, contractual arrangements, organization, data collection methods |
| Topics: | Quality Management, Project Management, Geographical Context, Risk Management, Procurement, Human Resources, Organizational Design, Business Strategy, Research Practice |
| Descriptive scope: | 5 PCTEA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here