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Impact of corporate credit scoring on construction contractors in China

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journal contribution
posted on 04.02.2019, 13:39 authored by Bo Xiong, Martin Skitmore, Paul Xia, Pablo Ballesteros-Perez, Kunhui Ye, Xiaoling Zhang
In 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

School

  • Architecture, Building and Civil Engineering

Published in

Journal of Construction Engineering and Management

Volume

145

Issue

4

Pages

05019002 - 05019002

Citation

XIONG, B. ... et al., 2019. Impact of corporate credit scoring on construction contractors in China. Journal of Construction Engineering and Management, 145(4): 05019002.

Publisher

© American Society of Civil Engineers (ASCE)

Version

AM (Accepted Manuscript)

Publisher statement

This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/

Publication date

2019-01-26

Notes

This material may be downloaded for personal use only. Any other use requires prior permission of the American Society of Civil Engineers. This material may be found at https://doi.org/10.1061/(asce)co.1943-7862.0001631

ISSN

0733-9364

eISSN

1943-7862

Language

en