Development of OLI+S Entry Decision Model for Construction Firms in International Markets

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.