Competitiveness framework of local contractors in the Malaysian construction industry towards globalisation and liberalisation.

Abstract

In Malaysia, one of the main challenges of the Internationalisation Thrust under Construction Industry Master Plan (CITP) 2016-2020 is an increasingly competitive local market, especially with the presence of foreign players as a result of globalisation and liberalisation. Apart from specialised and highly technical projects, foreign players are also increasingly gaining various types of projects in Malaysia. The gradual increase in foreign investors’ market share over the last few years indicate the need to enhance the capabilities of local players to remain competitive. Competitiveness frameworks formulated at the nation or industry level in previous studies were mainly focused on the macro level with limited studies measuring the contractor’s competitiveness at the firm level. Therefore, the development of a competitiveness framework at the firm or micro-level for local contractors in the Malaysian construction industry is required. This paper aims to appraise the competitiveness of local contractors towards globalisation and liberalisation in Malaysia. The objective of this paper is to develop a competitiveness framework for local contractors towards globalisation and liberalisation. This framework consists of five variables namely, competitiveness awareness of local contractors, factors contributing to the competitiveness of local contractors, drivers of competitiveness among local contractors, challenges among local contractors in the Malaysian construction industry in competing with local and foreign contractors and competitive strategies of local contractors in competing with local and foreign contractors. The partial least square-structural equation modelling (PLS-SEM) was employed to develop the competitiveness framework consisting of five variables. Four variables namely, competitiveness awareness, competitiveness factors, drivers of competitiveness and competitive strategy shared a direct relationship. Meanwhile, challenges of competitiveness reported an indirect relationship with competitive strategy. This paper addresses the Internationalisation Thrust under CITP 2016-2020 to increase the competitiveness of the domestic market. The competitiveness framework developed in this paper serves as a guideline for local contractors in raising their competitive advantage amid the challenges of globalisation and liberalisation.