Analysing ownership, locational and internalization advantages of Chinese construction MNCs using rough sets analysis

Abstract

The rough sets analysis focusing on the ownership, locational and internalization (OLI) advantages of Chinese construction multinational corporations (MNCs) in the international market under Dunning's Eclectic Paradigm was adopted to overcome the sample size constraint in MNC research that seeks to examine the causality patterns of the factors identified. The rough sets methodology provides a solution that conventional statistical methods do not offer to ascertain how these factors are determined and their influence in the OLI analysis of the performance of Chinese construction MNCs. The rough sets approach to handling imperfect data with uncertainty and vagueness was adopted to describe dependencies between attributes, evaluate the significance of attributes and deal with inconsistencies. Based on a questionnaire survey of 31 Chinese construction MNCs, findings from the rough sets analysis suggest, among other things, that: (1) a firm is likely to perform well in terms of its ownership advantages when it has a significant advantage on its reputation and its accessibility to resources when compared with local contractors; (2) a firm may be expected to achieve better results in terms of its locational advantages if the large number of competitors from China in the host countries becomes its most important consideration; and (3) a firm that conscientiously avoids or reduces information search and business negotiation costs would tend to perform well in terms of its internalization advantages.