Internationalization of the construction industry in the global value chain
Abstract
The construction sector plays a significant role in national economic development and accounts for a dominant portion of national economic growth. The international construction industry’s development has been explored from the perspective of the economy. Internationalization improves awareness about participation in international trade activities. This paper aims to quantify the internationalization of the construction industry in the global value chain. The sectoral participation index and interaction index are conducted to evaluate the internationalized degree of the construction industries. In the results, the distribution of the backward participation indices shows nearly all countries’ internationalization processes were still at the stage of benefiting from primary resources. The forward support index is easily influenced by the scale effect. The backward independence index accounts for a small percentage of national imports measured by value added. The main source of value-added supply was the local construction sector. This study proposes a comprehensive indicator to quantify the internationalization of the construction industries in the sight of national and global points. The references have a positive value for policymakers in the management of value-added flows in the international market and adjustment of the foreign trade environment.
Keyword : internationalization, construction industry, global value chain, value added
How to Cite
Niu, W., Xu, Z., Liu, B., & Liu, C. (2023). Internationalization of the construction industry in the global value chain. Technological and Economic Development of Economy, 29(4), 1336–1352. https://doi.org/10.3846/tede.2023.19426
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Bagci, K. (2016). Measuring within diversification. The International Trade Journal, 30(3), 223–236. https://doi.org/10.1080/08853908.2016.1138911
Bohn, T., Brakman, S., & Dietzenbacher, E. (2021). From exports to value added to income: Accounting for bilateral income transfers. Journal of International Economics, 131, 103496. https://doi.org/10.1016/j.jinteco.2021.103496
Borin, A., & Mancini, M. (2015). Follow the value added: Bilateral gross export accountings (Working Paper No. 1026). Bank of Italy Temi di Discussione. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2722439
Borin, A., & Mancini, M. (2019). Measuring what matters in global value chains and value-added trade (Policy Research Working Paper 8804). World Bank Group. https://doi.org/10.1596/1813-9450-8804
Dietz, T., & Rosa, E. A. (1997). Effects of population and affluence on CO2 emissions. Proceedings of the National Academy of Sciences of the United States of America, 94(1), 175–179. https://doi.org/10.1073/pnas.94.1.175
Fernández-Amador, O., Francois, J. F., Oberdabernig, D. A., & Tomberger, P. (2020). Economic growth, sectoral structures, and environmental methane footprints. Applied Economics, 52(13), 1460–1475. https://doi.org/10.1080/00036846.2019.1676387
Gao, Q., Liu, B., Li, J., Liu, C., & Xu, Y. (2022). Environ-economic balance analysis in bilateral industrial trade: A comparison between Australia and China. Technological and Economic Development of Economy, 28(3), 676–693. https://doi.org/10.3846/tede.2022.16575
Gozgor, G., & Paramati, S. R. (2022). Does energy diversification cause an economic slowdown? Evidence from a newly constructed energy diversification index. Energy Economics, 109, 105970. https://doi.org/10.1016/j.eneco.2022.105970
Ipsmiller, E., Dikova, D., & Brouthers, K. D. (2022). Digital internationalization of traditional firms: Virtual presence and entrepreneurial orientation. Journal of International Management, 28(4), 100940. https://doi.org/10.1016/j.intman.2022.100940
Jankowska, B., & Götz, M. (2017). Internationalization intensity of clusters and their impact on firm internationalization: The case of Poland. European Planning Studies, 25(6), 958–977. https://doi.org/10.1080/09654313.2017.1296111
Kersan-Škabić, I. (2019). The drivers of global value chain (GVC) participation in EU member states. Economic Research-Ekonomska Istraživanja, 32(1), 1204–1218. https://doi.org/10.1080/1331677X.2019.1629978
Kim, K., Hwang, J., Jung, S., Kim, E., & Ardito, L. (2019). Which technology diversification index should be selected?: Insights for diversification perspectives. Cogent Business & Management, 6(1), 1643519. https://doi.org/10.1080/23311975.2019.1643519
Koopman, R., Powers, W., Wang, Z., & Wei, S. J. (2010). Give credit where credit is due: Tracing value added in global production chains (Working Paper 16426). National Bureau of Economic Research. https://doi.org/10.3386/w16426
Koopman, R., Wang, Z., & Wei, S.-J. (2014). Tracing value-added and double counting in gross exports. American Economic Review, 104(2), 459–494. https://doi.org/10.1257/aer.104.2.459
Leontief, W. (1986). Input-output economics (2nd ed.). Oxford University Press.
Liu, B., Gao, Q., Zhu, R., Sun, J., & Liu, C. (2022). Measuring the developing trends of international construction industries in global value chains based on value added. Applied Economics, 54(52), 6065–6081. https://doi.org/10.1080/00036846.2022.2056570
Liu, B., Zhang, L., Liu, C., Wang, D., Sun, J., Luther, M., & Xu, Y. (2019). Measuring energy poverty based on energy embodied in exports of vertical specialisation trade in the construction sector. Energy and Buildings, 196, 157–168. https://doi.org/10.1016/j.enbuild.2019.05.022
Liu, B., Zhang, L., Sun, J., Wang, D., Liu, C., Luther, M., & Xu, Y. (2020a). Analysis and comparison of embodied energies in gross exports of the construction sector by means of their value-added origins. Energy, 191, 116546. https://doi.org/10.1016/j.energy.2019.116546
Liu, B., Zhang, L., Sun, J., Wang, D., Liu, C., Luther, M., & Xu, Y. (2020b). Composition of energy outflows embodied in the gross exports of the construction sector. Journal of Cleaner Production, 248, 119296. https://doi.org/10.1016/j.jclepro.2019.119296
Mehta, S. (2022). Upgrading within global value chains: Backward linkages, forward linkages and technological capabilities. Asian Journal of Technology Innovation, 30(3), 581–600. https://doi.org/10.1080/19761597.2021.1938152
Montalbano, P., & Nenci, S. (2022). Does global value chain participation and positioning in the agriculture and food sectors affect economic performance? A global assessment. Food Policy, 108, 102235. https://doi.org/10.1016/j.foodpol.2022.102235
Sakawa, H., Watanabel, N., & Gu, J. (2022). Internationalization and the reliance of analyst forecasts in stakeholder-oriented corporate governance: Evidence from Japanese MNEs. Pacific-Basin Finance Journal, 73, 101755. https://doi.org/10.1016/j.pacfin.2022.101755
Șerban, A. C., Pelinescu, E., & Dospinescu, A. S. (2022). Beta convergence analysis of gross value added in the high-technology manufacturing industries. Technological and Economic Development of Economy, 28(2), 290–312. https://doi.org/10.3846/tede.2021.15918
Sommer, D., & Bhandari, K. R. (2022). Internationalization of R&D and innovation performance in the Pharma Industry. Journal of International Management, 28(3), 100927. https://doi.org/10.1016/j.intman.2022.100927
Tallarida, R. J. (2002). The interaction index: A measure of drug synergism. Pain, 98(1), 163–168. https://doi.org/10.1016/S0304-3959(02)00041-6
Timmer, M. P., Dietzenbacher, E., Los, B., Stehrer, R., & de Vries, G. J. (2015). An illustrated user guide to the World Input–Output Database: The case of global automotive production. Review of International Economics, 23(3), 575–605. https://doi.org/10.1111/roie.12178
Wach, K., Maciejewski, M., & Głodowska, A. (2022). U-shaped relationship in international entrepreneurship: Entrepreneurial orientation and innovation as drivers of internationalisation of firms. Technological and Economic Development of Economy, 28(4), 1044–1067. https://doi.org/10.3846/tede.2022.16690
Wang, J., Wan, G., & Wang, C. (2019). Participation in GVCs and CO2 emissions. Energy Economics, 84, 104561. https://doi.org/10.1016/j.eneco.2019.104561
Wang, L., Zhang, B., Xie, R., & Su, B. (2020). The drivers of export value-added in China’s provinces: A multi-regional input–output model. Applied Economics, 52(57), 6199–6214. https://doi.org/10.1080/00036846.2020.1787322
Wang, Y., Yao, X., & Li, K. (2022). Imitation and rapid internationalization of emerging market firms. Journal of World Business, 57(6), 101364. https://doi.org/10.1016/j.jwb.2022.101364
Yang, J., Cai, G., Zheng, G., & Gu, Q. (2022). Firm internationalization and cost of equity: Evidence from China. China Journal of Accounting Research, 15(2), 100237. https://doi.org/10.1016/j.cjar.2022.100237
Yang, N., & Liu, Q. (2022). The interaction effects of GVC involvement and domestic R&D on carbon emissions: Evidence from China’s industrial sectors. Technology Analysis & Strategic Management, 34(6), 687–702. https://doi.org/10.1080/09537325.2021.1916456
Yang, Y., Li, J., Sun, X., & Chen, J. (2014). Measuring external oil supply risk: A modified diversification index with country risk and potential oil exports. Energy, 68, 930–938. https://doi.org/10.1016/j.energy.2014.02.091
Žarković, M., Ćetković, J., Redzepagic, S., Đurović, G., Vujadinović, R., & Živković, A. (2022). Economic growth determinants in new and old EU countries with focus on construction. Technological and Economic Development of Economy, 28(6), 1622–1648. https://doi.org/10.3846/tede.2022.17598
Zhai, Z., & Ghosal, V. (2022). Internationalization of innovation and firm performance in the pharmaceutical industry. International Review of Economics & Finance, 80, 882–905. https://doi.org/10.1016/j.iref.2022.02.058
Zhong, Z., Guo, Z., & Zhang, J. (2021). Does the participation in global value chains promote interregional carbon emissions transferring via trade? Evidence from 39 major economies. Technological Forecasting and Social Change, 169, 120806. https://doi.org/10.1016/j.techfore.2021.120806
Bohn, T., Brakman, S., & Dietzenbacher, E. (2021). From exports to value added to income: Accounting for bilateral income transfers. Journal of International Economics, 131, 103496. https://doi.org/10.1016/j.jinteco.2021.103496
Borin, A., & Mancini, M. (2015). Follow the value added: Bilateral gross export accountings (Working Paper No. 1026). Bank of Italy Temi di Discussione. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2722439
Borin, A., & Mancini, M. (2019). Measuring what matters in global value chains and value-added trade (Policy Research Working Paper 8804). World Bank Group. https://doi.org/10.1596/1813-9450-8804
Dietz, T., & Rosa, E. A. (1997). Effects of population and affluence on CO2 emissions. Proceedings of the National Academy of Sciences of the United States of America, 94(1), 175–179. https://doi.org/10.1073/pnas.94.1.175
Fernández-Amador, O., Francois, J. F., Oberdabernig, D. A., & Tomberger, P. (2020). Economic growth, sectoral structures, and environmental methane footprints. Applied Economics, 52(13), 1460–1475. https://doi.org/10.1080/00036846.2019.1676387
Gao, Q., Liu, B., Li, J., Liu, C., & Xu, Y. (2022). Environ-economic balance analysis in bilateral industrial trade: A comparison between Australia and China. Technological and Economic Development of Economy, 28(3), 676–693. https://doi.org/10.3846/tede.2022.16575
Gozgor, G., & Paramati, S. R. (2022). Does energy diversification cause an economic slowdown? Evidence from a newly constructed energy diversification index. Energy Economics, 109, 105970. https://doi.org/10.1016/j.eneco.2022.105970
Ipsmiller, E., Dikova, D., & Brouthers, K. D. (2022). Digital internationalization of traditional firms: Virtual presence and entrepreneurial orientation. Journal of International Management, 28(4), 100940. https://doi.org/10.1016/j.intman.2022.100940
Jankowska, B., & Götz, M. (2017). Internationalization intensity of clusters and their impact on firm internationalization: The case of Poland. European Planning Studies, 25(6), 958–977. https://doi.org/10.1080/09654313.2017.1296111
Kersan-Škabić, I. (2019). The drivers of global value chain (GVC) participation in EU member states. Economic Research-Ekonomska Istraživanja, 32(1), 1204–1218. https://doi.org/10.1080/1331677X.2019.1629978
Kim, K., Hwang, J., Jung, S., Kim, E., & Ardito, L. (2019). Which technology diversification index should be selected?: Insights for diversification perspectives. Cogent Business & Management, 6(1), 1643519. https://doi.org/10.1080/23311975.2019.1643519
Koopman, R., Powers, W., Wang, Z., & Wei, S. J. (2010). Give credit where credit is due: Tracing value added in global production chains (Working Paper 16426). National Bureau of Economic Research. https://doi.org/10.3386/w16426
Koopman, R., Wang, Z., & Wei, S.-J. (2014). Tracing value-added and double counting in gross exports. American Economic Review, 104(2), 459–494. https://doi.org/10.1257/aer.104.2.459
Leontief, W. (1986). Input-output economics (2nd ed.). Oxford University Press.
Liu, B., Gao, Q., Zhu, R., Sun, J., & Liu, C. (2022). Measuring the developing trends of international construction industries in global value chains based on value added. Applied Economics, 54(52), 6065–6081. https://doi.org/10.1080/00036846.2022.2056570
Liu, B., Zhang, L., Liu, C., Wang, D., Sun, J., Luther, M., & Xu, Y. (2019). Measuring energy poverty based on energy embodied in exports of vertical specialisation trade in the construction sector. Energy and Buildings, 196, 157–168. https://doi.org/10.1016/j.enbuild.2019.05.022
Liu, B., Zhang, L., Sun, J., Wang, D., Liu, C., Luther, M., & Xu, Y. (2020a). Analysis and comparison of embodied energies in gross exports of the construction sector by means of their value-added origins. Energy, 191, 116546. https://doi.org/10.1016/j.energy.2019.116546
Liu, B., Zhang, L., Sun, J., Wang, D., Liu, C., Luther, M., & Xu, Y. (2020b). Composition of energy outflows embodied in the gross exports of the construction sector. Journal of Cleaner Production, 248, 119296. https://doi.org/10.1016/j.jclepro.2019.119296
Mehta, S. (2022). Upgrading within global value chains: Backward linkages, forward linkages and technological capabilities. Asian Journal of Technology Innovation, 30(3), 581–600. https://doi.org/10.1080/19761597.2021.1938152
Montalbano, P., & Nenci, S. (2022). Does global value chain participation and positioning in the agriculture and food sectors affect economic performance? A global assessment. Food Policy, 108, 102235. https://doi.org/10.1016/j.foodpol.2022.102235
Sakawa, H., Watanabel, N., & Gu, J. (2022). Internationalization and the reliance of analyst forecasts in stakeholder-oriented corporate governance: Evidence from Japanese MNEs. Pacific-Basin Finance Journal, 73, 101755. https://doi.org/10.1016/j.pacfin.2022.101755
Șerban, A. C., Pelinescu, E., & Dospinescu, A. S. (2022). Beta convergence analysis of gross value added in the high-technology manufacturing industries. Technological and Economic Development of Economy, 28(2), 290–312. https://doi.org/10.3846/tede.2021.15918
Sommer, D., & Bhandari, K. R. (2022). Internationalization of R&D and innovation performance in the Pharma Industry. Journal of International Management, 28(3), 100927. https://doi.org/10.1016/j.intman.2022.100927
Tallarida, R. J. (2002). The interaction index: A measure of drug synergism. Pain, 98(1), 163–168. https://doi.org/10.1016/S0304-3959(02)00041-6
Timmer, M. P., Dietzenbacher, E., Los, B., Stehrer, R., & de Vries, G. J. (2015). An illustrated user guide to the World Input–Output Database: The case of global automotive production. Review of International Economics, 23(3), 575–605. https://doi.org/10.1111/roie.12178
Wach, K., Maciejewski, M., & Głodowska, A. (2022). U-shaped relationship in international entrepreneurship: Entrepreneurial orientation and innovation as drivers of internationalisation of firms. Technological and Economic Development of Economy, 28(4), 1044–1067. https://doi.org/10.3846/tede.2022.16690
Wang, J., Wan, G., & Wang, C. (2019). Participation in GVCs and CO2 emissions. Energy Economics, 84, 104561. https://doi.org/10.1016/j.eneco.2019.104561
Wang, L., Zhang, B., Xie, R., & Su, B. (2020). The drivers of export value-added in China’s provinces: A multi-regional input–output model. Applied Economics, 52(57), 6199–6214. https://doi.org/10.1080/00036846.2020.1787322
Wang, Y., Yao, X., & Li, K. (2022). Imitation and rapid internationalization of emerging market firms. Journal of World Business, 57(6), 101364. https://doi.org/10.1016/j.jwb.2022.101364
Yang, J., Cai, G., Zheng, G., & Gu, Q. (2022). Firm internationalization and cost of equity: Evidence from China. China Journal of Accounting Research, 15(2), 100237. https://doi.org/10.1016/j.cjar.2022.100237
Yang, N., & Liu, Q. (2022). The interaction effects of GVC involvement and domestic R&D on carbon emissions: Evidence from China’s industrial sectors. Technology Analysis & Strategic Management, 34(6), 687–702. https://doi.org/10.1080/09537325.2021.1916456
Yang, Y., Li, J., Sun, X., & Chen, J. (2014). Measuring external oil supply risk: A modified diversification index with country risk and potential oil exports. Energy, 68, 930–938. https://doi.org/10.1016/j.energy.2014.02.091
Žarković, M., Ćetković, J., Redzepagic, S., Đurović, G., Vujadinović, R., & Živković, A. (2022). Economic growth determinants in new and old EU countries with focus on construction. Technological and Economic Development of Economy, 28(6), 1622–1648. https://doi.org/10.3846/tede.2022.17598
Zhai, Z., & Ghosal, V. (2022). Internationalization of innovation and firm performance in the pharmaceutical industry. International Review of Economics & Finance, 80, 882–905. https://doi.org/10.1016/j.iref.2022.02.058
Zhong, Z., Guo, Z., & Zhang, J. (2021). Does the participation in global value chains promote interregional carbon emissions transferring via trade? Evidence from 39 major economies. Technological Forecasting and Social Change, 169, 120806. https://doi.org/10.1016/j.techfore.2021.120806