Research On Influence Of Dualistic Psychic Distance On International Construction Contractor’s Market Entry Mode

As an important strategic basis for engineering contractors’ internationalization,the selection of appropriate entry mode can effectively avoid or deal with liability of foreignness and improve their organizational and operational performance after entering the market.Given that the construction industry is project-based and involves some distinctive entry modes,the complexity of international construction projects and high market commitment aggravate the difficulty of international construction contractor’s entry mode decision.Therefor,this thesis aims to identify the entry mode categories of international construction contractors(ICCs).Meanwhile,according to the theoretical framework of "Stimulus(S)-Organism(O)-Response(R)",exploring the decision-making mechanism of market entry mode from the perspective of dualistic psychic distance.First of all,the entry modes commonly used by ICCs are identified according to the practice and characteristics of the entry modes in the international construction field.A two-dimension model of entry mode for ICCs is constructed from ownership and value chain dimensions.Furthermore,based on the dynamic development process of Uppsala internationalization model,the evolution path of the ICCs’ entry mode is analyzed.Secondly,from the perspective of dualistic psychic distance,this thesis reveale the decision-making mechanism of ICC’s entry mode.The psychic l distance is regarded as the dual structure of psychic distance stimulus and psychic distance perception,and the internal mechanism of the asymmetry between the two is explored accordingly.On this basis,the method of PLS-SEM is adopted for testing hypotheses.The result demonstrate that: each dimension of psychic distance stimulus(culture,institution,geography,economy,business)has a positive impact on the ICCs’ psychic distance perception;and the specific market internationalization experience and resource endowment in organizational capability can negatively moderate the effect of psychic distance stimulus on psychic distance perception.Thirdly,based on the theoretical basis of cognitive shaping decision,this thesis explores ICCs’ entry mode decision under the perception of psychic distance.And suggesting that the strategic positioning of the ICCs and the attraction of host country’s market potential are the core mechanisms moderating the effect of psychic distance perception on entry mode decision.The experimental method is adopted for testing hypotheses.The result demonstrate that: the negative effect of psychic distance perception on market entry mode is verified.That is,the larger the psychic distance perception is,the more likely the ICCs are to adopt the entry mode with low market commitment.Moreover,when the market potential is large or the firm pursues longterm international expansion strategy,the negative effect of psychic distance perception on entry mode is weakened.Finally,based on the research conclusions of the above three parts,this thesis adopt the case-based reasoning(CBR)method to develop a decision-making mechanism for ICCs’ entry mode decision from the perspective of experiential learning.A two-stage retrieval mechanism is established,and the relevant experience of entry mode decisionmaking is extracted from the successful historical cases to guide the new case’s entry mode section.Then the validity of the model is proved by case analysis.Theoretically,my thesis complements the lack of research on ICCs’ entry mode in international construction field.The connotation and extension of psychic distance construct are expanded from the objective "distance" stimulus and the subjective "psychic" perception perspective,and revealing the asymmetry between dualistic psychic distance from the perspective of firm capacity.Using the SOR cognitive model to analyze the mechanism of dualistic psychic distance on ICCs’ entry mode,which extend application scope of SOR framework from the micro cognitive behavior paradigm to the cognition and decision-making at the enterprise level.In addition,this thesis provides a new perspective for the study of the relationship between stimulus(S)and organism(O)at the micro level.In practice,my thesis identifies the entry modes commonly used by ICCs and classifies them from the value chain and ownership dimensions.Furthermore,from the perspective of dualistic psychic distance,this thesis reveals the decision-making path of ICCs’ entry mode and establishes the corresponding decision-making model,which provides the system decision-making process and tools for the ICC to choose the entry mode,and reduces the transaction cost in the decision-making process.