COENG2019b.pdf (1.27 MB)
Download fileImpact of corporate credit scoring on construction contractors in China
journal contribution
posted on 2019-02-04, 13:39 authored by Bo Xiong, Martin Skitmore, Paul Xia, Pablo Ballesteros-Perez, Kunhui Ye, Xiaoling ZhangIn an attempt to enhance the trustworthiness of contractors and reduce corruption, the
China Government has launched a construction contractor credit scoring (CCCS) scheme in
Beijing for evaluating the compliance and integrity of contractors registered in the construction
market. The contribution of this paper to the Body of Knowledge is to analyze how the
incorporation of CCCS may affect general contractors’ present and future competitiveness
through a case study in China. The paper analyzes the procurement of 158 building projects
tendered in Beijing, involving 2071 local general contractors active in the market. The results
show that (1) the contractors’ CCCS scores are important for being awarded large and mega
project contracts; (2) CCCS scores have a generally positive effect on future corporate financial
income; and (3) that, contrary to expectations, the policy does not increase the CCCS of
companies. Finally, it is observed how the changing trend in contractors’ CCCS scores is highly correlated with their initial values (the scores of higher CCCS scoring companies increase
faster on average than other companies). Final remarks concern ways to better implement
CCCS schemes in the future and avoid the potential risks involved in their use.
Funding
The first author was financially supported by a QUT HDR Sponsorship from the research project “Hosting, Maintenance and Further Development of the BER – Cost Analysis Model” funded by the Commonwealth of Australia represented by the Department of Education.
History
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