International construction joint ventures between Singapore and developing countries

Abstract

Purpose The purposes of this paper is twofold: first, to assess the risks associated with the international construction joint ventures (ICJVs) between Singapore and developing countries and second, to investigate the risk allocation preferences in these ICJVs. Design/methodology/approach A questionnaire survey was conducted and responses were received from 38 firms that had participated in ICJVs with developing countries. A risk criticality (RC) index was adopted to evaluate the criticality of each risk. Findings The survey results reported “political instability” as the most critical risk and market-level risks were less critical than country and project-level risks. Additionally, the results showed agreement on the risk ranking between building and infrastructure ICJVs, despite significant differences in the criticalities of five risks. Furthermore, five risks were preferably allocated to host and foreign partners, respectively, while 13 risks could be shared among partners. Research limitations/implications First, due to the sample size, one should be cautious when interpreting and generalizing the results. Second, the RC index proposed in this study was subjective as it was influenced by the individual experience and risk attitude of the respondents. Also, the RC values were calculated without considering the weights of the respondents. Lastly, the questionnaire survey, which has been widely used in identifying risk allocation preferences, may not identify the insights of practitioners into the risk allocation practices. Practical implications This study provides a clear understanding of the risks associated with forming ICJVs with developing countries and the preferred risk allocation. Although, this study is focused on the risks faced by the Singapore-developing country ICJVs, the identification of the potential risks allows companies from other countries to customize their risk profile and assess the risks before they form ICJVs with developing countries. Originality/value As few studies have explored the risk allocation preferences in ICJVs, this study expands the literature and provides practitioners with important information for preparing joint venture contracts or agreements. Thus, this study can contribute to the literature relating to ICJVs.

Empirical Study on the Obstacles to the Success of Joint Ventures in Construction Projects

“…Meanwhile, the influence of external risks on the success factors of time, cost, and quality standards in international construction joint venture (ICJV) projects in Pakistan has been investigated from political, economic, legislative, social, and environmental perspectives [15]. Political instability was revealed to be the greatest challenge or risk of ICJVs between Singapore and developing countries [16]. Deng et al [17] conducted an in-depth study of political risk management in international construction projects by identifying both microvariables and macrovariables in China.…”

“…Dulaimi [35] found that ICJVs did not actually create an environment conducive to knowledge sharing as expected because it was difficult to integrate the foreign culture and local culture. Risk allocation was another challenge for ICJVs, as it was difficult to conduct because of the "unclear division of responsibilities and risks" and "differences in culture and working styles" [16]. David et al [36] explored safety management challenges for ICJV workforces through a case study in the UK and revealed that different legislation and standards, different working practices, different national cultures, and poor worker welfare were the problems that workers on ICJV projects faced.…”

“…Improvement of partnerships is a critical factor in maintaining the stability of joint ventures. In the research on risk control in joint ventures, trust and control have been considered two important factors affecting risk [16]. Relationship exchange theory holds that trust and similar values and beliefs among joint venture partners are elements of an effective governance strategy [56].…”

Risk Management as a Success Factor in the International Activity of Spanish Engineering

“…Razzaq et al (2018) analyzed the main external risks that affect projects carried out by construction companies in Pakistan, with the objective of managing them properly. Hwang et al (2017) identified and assessed the main risks in the formation of International Construction Joint Ventures (ICJV) and the preferences in the allocation of risks. Liu et al (2016) explored the risk pathways in international construction projects undertaken by Chinese contractors, and examined the effects of risks on project objectives.…”

A Guide for Risk Management in Construction Projects: Present Knowledge and Future Directions

“…The subject of risk management in construction projects has been increasingly studying since the 1980s. Most of these studies have focused on how risks are identified or analyzed/assessed in different countries such as Australia [32,33], China [23,34,35], Ghana [36], Hong Kong [37,38], India [39,40], Indonesia [41,42], Italy [43], Korea [44], Malaysia [31,45], Mexico [46], New Zealand [47,48], Nigeria [49,50], Poland [51], Singapore [52,53], Spain [54], Sri Lanka [55], Tanzania [56], the United Kingdom [57,58], the United States of America [59,60], Vietnam [61,62] and Zambia [63]. These studies mostly used survey/interviews or case studies.…”