Abstract
The paper aims to provide a holistic approach to address how construction firms make decisions covering all three domains (location, timing and mode) across country, market, firm and project factors within the Ownership, Locational and Internalisation plus Specialty (OLI+S) paradigm. Questionnaires were administered to 62 project managers based on a sampling frame provided by the Construction Industry Development Board Malaysia. The findings provide empirical and theoretical insights on how the OLI+S model addresses firms’ entry decisions to penetrate international markets. It suggests that the ownership-entry decision factors focus on firms’ internal transferable advantages. The locational-entry decision factors emphasise attractiveness of certain locations where firms decided to invest and operate. The internalisation– entry decision factors emphasise the extent to which firms were able to manipulate their internal competitive assets (firm’s resources and capabilities). Finally, the specialty-entry decision factors emphasise on firms’ competency in project management and specialist expertise to handle complex projects based on their previous project experience. An example of construction firms’ unique characteristics, namely, specialty advantages based on the original Dunning’s OLI eclectic paradigm has been adopted. The established OLI+S entry decision model could be investigated to further refine other related internationalisation theory.
Highlights
The Dunning’s Eclectic Paradigm, or known as the Ownership, Locational and Internalization (OLI) theory (Dunning, 1988; Dunning, 1995; Dunning, 2001) has been the subject of extensive interest in the strategy literature in the past decades
Three equilibrium strategies arise: accommodate, marginalize, and collocate. We identify how these strategies emerge depending on the tradeoff between the opportunity costs of absence
This paper focuses only on the quantitative method using questionnaire survey sent to construction firms, presents only the quantitative findings based on the independent variables (ELETEM decisions) measured
Summary
The Dunning’s Eclectic Paradigm, or known as the Ownership, Locational and Internalization (OLI) theory (Dunning, 1988; Dunning, 1995; Dunning, 2001) has been the subject of extensive interest in the strategy literature in the past decades. Low and Jiang (2004) have incorporated a “Specialty” or S-advantages into their research framework known as Ownership, Locational and Internalization plus Specialty or OLI+S framework which became the basis of this study. When construction firms decided to enter a specific location in international markets, they must decide a suitable timing and an appropriate mode of entry to be adopted in their operations. Assessing these three decisions is a continuous process and has important implications on the long-term and short-term financial positions of the firms. Even though many international construction researchers have incorporated the OLI eclectic paradigm which include Seymour (1987), Cuervo and Pheng (2003), Low, Jiang and Leong (2004), Rahman (2014), Wong and Abdul‐Aziz (2009), Abdul-Aziz and Awil (2010), Abdul Aziz et al (2011) and Gabriel (2014), they did not consider the specialty advantages in their studies as introduced by Low and Jiang (2004)
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