MODELLING INTERNATIONAL TECHNOLOGY TRANSFER IN THAI CONSTRUCTION PROJECTS

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1 MODELLING INTERNATIONAL TECHNOLOGY TRANSFER IN THAI CONSTRUCTION PROJECTS A thesis submitted in fulfilment of the requirements for the award of the degree of Doctor of Philosophy by TANUT WAROONKUN B. Eng., M.Phil from Griffith School of Engineering GRIFFITH UNIVERSITY GOLD COAST CAMPUS March 2007

2 ii DECLARATION This work has not been previously submitted for a degree or diploma in any university. To the best my knowledge and belief, this thesis contains no material previously published or written by another person except where due reference is made in the thesis itself. Tanut Waroonkun March 2007

3 iii ACKNOWLEDGEMENT The research on which this thesis is based was undertaken at the Griffith School of Engineering, Griffith University, under the supervision of Dr. Rodney Anthony Stewart and Professor Sherif Mohamed. The author is greatly indebted to Dr. Stewart for having provided this research opportunity and for his enthusiastic supervision, enlightening inspiration and continuing encouragement throughout the course of this investigation. The author also appreciates the support provided for international conference attendance during his candidature. Special thanks are due to all the academic, technical and administrative staff at the Griffith School of Engineering, particularly the Dean of the former Faculty of Engineering and Information Technology, Professor Yew-Chaye Loo. The author is especially indebted to all the respondents who participated in the pilot and primary questionnaire survey as well as those involved in the validation case studies. The author also thanks the Thai Government and Office of the Civil Service Commission for providing the financial support which allowed this research to continue, unhindered. This support is gratefully acknowledged. To my family, Supavadee, Supanat, the author expresses deep gratitude for their constant encouragement and continued moral support. Last, the author is indebted to his parents for their understanding and encouragement, right from the very beginning. The completion of this research is a very small reward for their efforts and great expectations.

4 iv LIST OF PUBLICATIONS The following papers were produced to disseminate some of the concepts and results of the work undertaken by the author during the course of this Ph.D. research study. Journal Publications Stewart, R.A. and Waroonkun, T. (2007). "Benchmarking construction technology transfer in Thailand." Construction Innovation, forthcoming [accepted September, 2006]. Waroonkun, T. and Stewart, R.A. (2007). "Modelling the international technology transfer process in construction projects: evidence from Thailand." Journal of Technology Transfer, forthcoming [accepted March, 2007]. Waroonkun, T. and Stewart, R.A. (2007). "Pathways to enhanced value creation from the international technology transfer process in Thai construction projects" Engineering, Construction and Architectural Management, submitted for publication. Conference Publications Waroonkun, T., Stewart, R.A. and Mohamed, S. (2005a). "International technology transfer in construction: process performance evaluation." CIB W102 Conference on Information and Knowledge Management in a Global Economy: Challenges and Opportunities for Construction Organizations, Lisbon, Portugal,

5 v Waroonkun, T., Stewart, R.A. and Mohamed, S. (2005b). "Modeling the technology transfer process in the Thai construction industry: a pilot study." 1st International Conference on Construction Engineering and Management: Globalization and Collaboration in Construction, Seoul, Korea, Waroonkun, T., Stewart, R.A. and Mohamed, S. (2006). "Factors affecting technology transfer performance: evidence from Thailand." 1st International Construction Specialty Conference, Calgary, Alberta, Canada, CT CT Waroonkun, T. and Stewart, R. A. (2007). "Evaluating international technology transfer on Thai construction projects." 4 th International Conference on Construction in the 21 st Century CITC-IV, Gold Coast, Australia, forthcoming [accepted March, 2007].

6 vi ABSTRACT International technology transfer from developed to developing countries continues to stimulate rapid industrialisation and economic growth globally, particularly in the fast growing newly industrialised countries. Numerous researchers and practitioners have defined the term technology transfer (TT) differently, due largely to their individual fields of study. For the purpose of this research, international TT has been defined as when all types of knowledge relating to the construction field (e.g. design, construction process, material use, equipment utilisation, etc.) are transferred from a foreign party (transferor) to a host party (transferee) that arranges to receive it. Various academic and industry reports have stated that developing countries lack the technology and the know-how for managing large, sophisticated, multi-disciplinary construction projects. However, these deficiencies can be overcome by implementing TT initiatives on construction projects in developing countries, to enhance the local industry s technical capabilities and knowledge. Such initiatives are in the interest of many developing countries because a strong construction industry is fundamental for creating the necessary buildings and infrastructure which underpin sustainable economic activity and ultimately improve living standards. Specifically, TT can add value to the host construction sector in the following three areas: (1) economic advancement; (2) knowledge advancement; and (3) project performance. However, there are numerous factors, which have an impact on the degree of success of international TT initiatives. This study identified four main categories of factors (enablers), which can impact on the TT process and its outcomes for the construction sector, namely, transfer environment, learning environment, transferor characteristics and transferee characteristics. The performance of, and interrelationship between, these enablers contributes to the degree of value added to the local industry through the TT process.

7 vii Therefore, the objective of this research was to develop a model for international TT in construction projects, which includes appropriate and reliable enabling and outcome factors. Such a model is an essential first step to understanding the international TT process. Knowing the key factors and how they interact ensures that host government and industry can manipulate the TT process to derive the most value for their construction sector. To achieve the above-mentioned objective, this research solicited industry input via two questionnaire surveys (Pilot Study, Primary Study) and follow up case studies. The pilot study was primarily used to test the validity and reliability of the data obtained and to facilitate the refinement of questionnaire items and scale prior to commencement of the primary study. The target group of respondents in the pilot study included design and construction professionals from construction projects involving TT initiatives. Statistical analysis techniques including, mean, standard deviation, correlation and regression were utilised for the analysis of the data received from the pilot study. Due to the small sample size the analysis results were mainly used as guidance for refining the research method and associated questionnaire survey for the primary study. In particular, minor modification to the wording of the enabler and outcome factor questions were undertaken for the new survey instrument, therefore improving respondents understanding of the various elements of the international TT process. The objective of the primary study was to examine the validity of the conceptual model factors and sub-factors, investigate causal paths and develop a statistically verified model for international TT in construction projects. In total, 300 surveys were distributed and 162 were returned, representing a response rate of 54 per cent. Statistical analysis techniques, including, exploratory factor analysis (EFA), confirmatory factor analysis (CFA) and structural equation modelling (SEM) were used to exploit the survey data in order to address all research questions. Analysis resulted in an international TT model consisting of four TT enabling factors, namely, government influence, relationship building, transferor characteristics and transferee characteristics in addition to one outcome factor named TT value added. Moreover, through the use of SEM (i.e. path analysis) the five significant interrelationships between the factors in the international TT model were discovered. These included government influence (GI)

8 viii transferee characteristics (TE), government influence (GI) transferor characteristics (TR), transferee characteristics (TE) transferor characteristics (TR), transferor characteristics (TR) relationship building (RB) and relationship building (RB) TT value added (VA). Developing strong relationships between the transferor and transferee proved to be the strongest enabler of TT value creation in the construction context. The final international TT model derived from the primary study formed the foundations of a developed methodology for benchmarking construction TT performance in developing and newly industrialised countries. This methodology was utilised to provide a baseline benchmark index of TT performance in the Thai construction sector. A benchmark score of 71 per cent was determined, implying that todate (2005) construction TT ventures in Thailand have been operating at moderate to high effectiveness. Furthermore, the TT performance of individual transferor nationalities operating in Thailand was compared. The study provides some evidence that over the last couple of decades Japanese construction firms were not only the leading exporter of construction services to Thailand but also performed higher across all influenced TT performance perspectives. Case studies were employed for the purpose of validating the accuracy of the causal paths in the international TT model and application of the developed TT benchmarking methodology on individual large-scale construction projects in Thailand. In total, case studies on five foreign companies working with Thai companies, on four present and recently completed construction projects was conducted. Forty seven (47) respondents representing Thai construction and engineering professionals participated in an additional and extended questionnaire survey. The results obtained from the case studies supported the path model developed in the primary study and the associated structural equations. Moreover, the case studies provided the opportunity to establish baseline benchmarks of international TT performance (TT index) for individual projects. Amongst the five companies evaluated, Thai respondents working with the German firm (project 2, company 2) recorded the highest overall TT index score. This supports the findings of the primary study where German firms had the second highest overall TT index score. Surprisingly, the overall TT index scores for case study projects where

9 ix Japanese companies (3 no.) were the foreign partner scored significantly lower than those from the primary study. Recent Thai construction projects typically adopt English as the common site language making Thai-Japanese communications more difficult. International TT has the potential to rapidly develop the construction sectors of developing countries. However, rates of international TT diffusion have typically been much lower than expectations prompting the author to undertake this study on modelling the TT process and its outcomes for host construction sectors. Nevertheless, the final path model for international TT in construction projects and the associated TT benchmarking method reported herein require further development. Firstly, future research should more closely examine the impact of culture and training on the TT process and incorporate such enablers into the presented path model. Secondly, future research should attempt to further validate the formulated path model and benchmarking method by applying them in different contexts (i.e. different countries, different projects, etc.). Thirdly, future benchmarking investigations should include some quantitative TT performance indicators to provide a more accurate representation of the effectiveness/success of a TT process or outcome. Finally, a longitudinal study would better quantify the causal link between lagging and leading TT process enabling and outcome factors. Such a study could result in a robust systems dynamics model of the international TT process and the outcomes it can generate for the host construction sector.

10 x TABLE OF CONTENTS Title Page Declaration Acknowledgement List of Publications Abstract Table of Contents List of Figures List of Tables i ii iii iv vi x xv xvii Chapter 1 Introduction 1.1 Introduction Research Objectives Research Method Conceptual Model Development Pilot Study Primary Study Model Refinement and Validation Scope of Study Thesis Layout 1-8 Chapter 2 Literature Review 2.1 Introduction Critical Review of Existing Models Malik (2002) Calantone et al. (1990) Simkoko (1992) Wang et al. (2004) Lin and Berg (2001) 2-13

11 xi 2.3 Rationale for New Model Malik (2002) Calantone et al. (1990) Simkoko (1992) Wang et al. (2004) Lin and Berg (2001) Conceptual Model for International TT in Construction Projects Transfer Environment Learning Environment Transferor and Transferee Characteristics TT- Induced Value Creation 2-30 (a) Economic Advancement 2-30 (b) Knowledge Advancement 2-31 (c) Project Performance Summary 2-33 Chapter 3 Research Method 3.1 Introduction Research Design Selection of Data Collection Methods Pilot Study Primary Study Questionnaire Analysis Methods Method for Benchmarking TT Performance Model Refinement and Validation Questionnaire Analysis Methods Summary 3-12 Chapter 4 Data Analysis and Results: Pilot Study 4.1 Introduction Research Approach 4-2

12 xii 4.3 Classification of Respondents Mean and Standard Deviation Correlation Regression Questionnaire Refinement for Primary Study Summary 4-22 Chapter 5 Data Analysis and Results: Primary Study 5.1 Introduction Research Approach Classification of Respondents Rating TT Enabling and Outcome Variables Analysis of Variance (ANOVA) Mean and Standard Deviation Transferor Nationality Comparison Exploratory Factor Analysis Structural Equation Modelling (SEM) Goodness-of-fit Indices and Measures Measurement Model Path Model SEM Discussion Limitations of Primary Study Summary 5-39 Chapter 6 Benchmarking Construction Technology Transfer in Thailand 6.1 Introduction TT Perspectives Evaluating TT indicators Evaluating Transferor Nationalities Method for Benchmarking TT Performance Determining Relative and Global Weights Evaluating Technology Transfer Transferor Nationality Comparative Analysis 6-12

13 xiii 6.5 Future Development Summary 6-15 Chapter 7 Case Study: Model Validation 7.1 Introduction Research Approach TT Performance Indicators Relationship Building Transferor and Transferee Characteristic TT Value Added Case Studies Project 1 Suvarnabhumi Airport Project 2 Mass Rapid Transit Project Project 3 Bridgestone Tyre Manufacturing Project 4 Gas Plants Classification of Respondents Mean and Standard Deviation Benchmarking Technology Transfer Performance Case Studies Determining Relative and Global Weight Evaluating Technology Transfer Company Comparative Analysis Nationality Comparative Analysis Model Validation Comparing Actual Mean Values Determining the Predicted Scores Comparison Between the Actual and Predicted Mean Values Summary 7-52 Chapter 8 Conclusions, Contributions and Implications 8.1 Introduction Research Objectives and Outcomes TT Enablers and Outcomes Factors Identification International TT Model Development 8-3

14 xiv International TT Performance Benchmarking Method Development Contribution to Research Implications for Construction Sectors in Developing Countries Limitations of Research Directions for Future Research Closure 8-10 References R-1 Appendix A Pilot Study Questionnaire Survey (English & Thai) A-1 Appendix B Primary Study Questionnaire Survey (English & Thai) A-13 Appendix C Case Study Questionnaire Survey (English & Thai) A-25

15 xv LIST OF FIGURES Figure 2.1 Malik interactive broadcast model 2-4 Figure 2.2 Calantone et al. framework 2-6 Figure 2.3 Simkoko research model 2-10 Figure 2.4 Wang et al. research model 2-13 Figure 2.5 Lin and Berg research model 2-14 Figure 2.6 Conceptual model for international TT in construction projects 2-18 Figure 3.1 Research design 3-3 Figure 4.1 Respondents construction experience 4-3 Figure 4.2 Respondents degree of involvement in international TT projects 4-4 Figure 4.3 Position of respondents 4-5 Figure 4.4 Respondents organisations type 4-6 Figure 4.5 International TT success mean rating 4-10 Figure 4.6 International TT project description and year completed 4-12 Figure 4.7 Value of projects incorporating international TT 4-12 Figure 4.8 Project transferor nationality count 4-13 Figure 5.1 Respondents construction experience 5-6 Figure 5.2 Respondents degree of involvement in international TT projects 5-7 Figure 5.3 Position of respondents 5-8 Figure 5.4 Respondents organisation type 5-9 Figure 5.5 International TT success mean rating 5-14 Figure 5.6 International TT project description and year completed 5-17 Figure 5.7 Value of projects incorporating international TT 5-18 Figure 5.8 Project transferor nationality count 5-18 Figure 5.9 International TT project planning count 5-19 Figure 5.10 Transferor nationality construct mean values 5-27

16 xvi Figure 5.11 Confirmatory factor analysis (CFA) 5-35 Figure 5.12 Path model for international TT in construction projects 5-37 Figure 6.1 Seven proposed perspectives for benchmarking technology transfer 6-4 Figure 6.2 Spider diagram showing the performance score for each framework perspective 6-13 Figure 6.3 Comparative performance scores for perspectives influenced by transferor nationality 6-13 Figure 7.1 Foreign companies working with Thai companies 7-15 Figure 7.2 Passenger terminal building located at Suvarnabhumi Airport 7-15 Figure 7.3 Chaloem Ratchamongkhon line 7-17 Figure 7.4 Bridgestone tyre manufacturing factory (BTMT Phase 3) 7-19 Figure 7.5 Oil and gas field map showing the location of Phu Horm, Thailand 7-20 Figure 7.6 Respondents construction experience 7-21 Figure 7.7 Respondents experience on international TT projects 7-22 Figure 7.8 Respondents project description 7-23 Figure 7.9 Position of respondents 7-24 Figure 7.10 Respondents organisation type 7-24 Figure 7.11 Spider diagrams showing TT performance scores for each company 7-40 Figure 7.12 Comparative TT performance scores for five companies 7-41 Figure 7.13 Path model validation with the three significant paths 7-44 Figure 7.14 Comparison between the predicted and actual mean value of TR 7-50 Figure 7.15 Comparison between the predicted and actual mean value of RB 7-51 Figure 7.16 Comparison between the predicted and actual mean value of VA 7-52

17 xvii LIST OF TABLES Table 2.1 Transfer environment sub-factor 2-22 Table 2.2 Learning environment sub-factor 2-25 Table 2.3 Transferor characteristics sub-factor 2-29 Table 2.4 Transferee characteristics sub-factor 2-29 Table 2.5 Economic advancement sub-factor 2-30 Table 2.6 Knowledge advancement sub-factor 2-31 Table 2.7 Project performance sub-factor 2-33 Table 3.1: Research design tasks and outcomes 3-4 Table 4.1 Years of experience and past projects of respondents 4-5 Table 4.2 Personal characteristics of respondents 4-7 Table 4.3 Mode of transfer frequencies 4-8 Table 4.4 Skill transferred frequencies for transferor nationality 4-9 Table 4.5 International TT success rating frequencies 4-10 Table 4.6 Mean and standard deviation 4-16 Table 4.7 Column B Pearson correlation matrix 4-18 Table 4.8 The single regression analysis results 4-20 Table 5.1 TT process enabling and value creation factors and variables 5-5 Table 5.2 Years of experience and past projects of respondents 5-7 Table 5.3 Personal characteristics of respondents 5-10 Table 5.4 Mode of transfer frequencies 5-12 Table 5.5 Skill transferred frequencies for transferor nationality 5-13 Table 5.6 International TT success rating frequencies 5-15 Table 5.7 Construct and variable mean and standard deviation 5-23 Table 5.8 Transferor nationality comparisons (paired sample t-tests) 5-25 Table 5.9 Transferor nationality sample mean and standard deviation 5-26

18 xviii Table 5.10 Varimax rotated factor loading for the eight-factor solution 5-29 Table 5.11 Varimax rotated factor loading for the single outcome factor solution 5-30 Table 5.12 Summary of goodness-of-fit and model evaluation indices 5-32 Table 5.13 Measurement model results 5-34 Table 5.14 Standardised path coefficients and structural equations 5-36 Table 6.1 TT perspective and indicator mean and standard deviation 6-6 Table 6.2 Perspective and indicator mean and standard deviation transferor nationality 6-8 Table 6.3 Evaluating technology transfer baseline performance 6-11 Table 7.1 TT performance indicators for relationship building factor 7-5 Table 7.2 TT performance indicators for transferor characteristics factor 7-8 Table 7.3 TT performance indicators for transferee characteristics factor 7-9 Table 7.4 TT value added performance indicators 7-11 Table 7.5 Years of experience and past projects of respondents 7-22 Table 7.6 Personal characteristics of respondents 7-25 Table 7.7 Mean and standard deviation for sub-factors and indicators 7-28 Table 7.8 Mean and standard deviation for factors and sub-factors 7-30 Table 7.9 Evaluating technology transfer baseline performance (company 1) 7-32 Table 7.10 Evaluating technology transfer baseline performance (company 2) 7-33 Table 7.11 Evaluating technology transfer baseline performance (company 3) 7-34 Table 7.12 Evaluating technology transfer baseline performance (company 4) 7-35 Table 7.13 Evaluating technology transfer baseline performance (company 5) 7-36 Table 7.14 TT perspective performance scores influenced by Japanese transferors 7-42 Table 7.15 TT perspective performance scores influenced by German transferors 7-43

19 xix Table 7.16 Structural equations of path model validation 7-44 Table 7.17 Mean and standard deviation of applicable four TT perspectives for the five company case studies and the primary study 7-46 Table 7.18 The equivalent Z scores and the predicted Z scores 7-48 Table 7.19 Comparison between the actual and predicted mean values of TR 7-49 Table 7.20 Comparison between the actual and predicted mean values of RB 7-51 Table 7.21 Comparison between the actual and predicted mean values of VA 7-52

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