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Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
https://doi.org/10.24294/jipd.v8i8.5729
1
Article
Between political legitimacy and strategic competitiveness: Overseas
corporate social responsibility patterns of Chinese international contractors
Yue Lin
Centre of East Asian Studies, Autonomous University of Madrid, 28049 Madrid, Spain; yue.lin@uam.es
Abstract: This article examines the overseas corporate social responsibility (CSR) patterns of
Chinese international contractors (CICs). Adopting an institutional and political economy
approach, a unique dataset is constructed with country-specific contents drawn from CSR-
related reports and website information of 50 top CICs. This dataset provides a foundation for
systematic content analysis of CICs’ overseas CSR practices, revealing that both political
legitimacy-seeking and strategic competitiveness-seeking motivations drive CICs’ CSR
activities abroad, characterized by the prioritization of customer and community engagement.
The findings highlight the coexistence of the exogenous pressures for the national image-
building purpose and the endogenous awareness of CSR strategic importance for corporate
internationalization. The hybridization of political and economic rationales is presented as the
defining feature of CICs’ current overseas CSR patterns, with the balance between them being
determined by stakeholder type and internal business needs influenced by corporate
internationalization experience.
Keywords: corporate social responsibility (CSR); Chinese international contractors (CICs);
political legitimacy; strategic competitiveness; internationalization
1. Introduction
In 2021, of the top 250 international contractors measured by overseas turnover,
79 were mainland Chinese companies, collectively generating a substantial revenue of
US$ 112.95 billion (ENR, 2022). This marks a significant evolution from their status
in 2001, positioning Chinese international contractors (CICs) as frontrunners in the
global contracting market. Within the framework of the Belt and Road Initiative (BRI),
these enterprises are touted as pivotal contributors to the social well-being of host
countries. Despite this, the construction industry itself faces inherent irresponsibility,
including adverse environmental impact, hazardous working conditions, and
involvement in unethical practices (Xia et al., 2018). This juxtaposition prompts a
crucial inquiry: To what extent have CICs embraced socially responsible practices,
particularly in developing nations where such efforts are most needed?
Existing literature on this topic, though growing, remains limited and is
characterized by two divergent trends. The first stream of studies has concentrated on
CSR awareness and implementation of Chinese construction firms in general. These
studies, based on content analysis of CSR reports and questionnaire surveys, develop
CSR performance indicators (Jiang and Wong, 2016) and identify factors influencing
CSR engagement, such as external institutional pressures (Li et al. 2019; Zhang et al.,
2024), ownership structure (Ma and Liu, 2024; Zhang et al., 2022), firm size (Ma and
Liu, 2024), internal cognitive pressures (Zhang et al., 2024), and the scale and scope
of international diversification (Ma et al., 2022; Sang et al., 2022). Furthermore, some
CITATION
Lin Y. (2024). Between political
legitimacy and strategic
competitiveness: Overseas corporate
social responsibility patterns of
Chinese international contractors.
Journal of Infrastructure, Policy and
Development. 8(8): 5729.
https://doi.org/10.24294/jipd.v8i8.5729
ARTICLE INFO
Received: 9 April 2024
Accepted: 24 May 2024
Available online: 27 August 2024
COPYRIGHT
Copyright © 2024 by author(s).
Journal of Infrastructure, Policy and
Development is published by EnPress
Publisher, LLC. This work is licensed
under the Creative Commons
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by/4.0/
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
2
studies also compare CICs’ disclosure and communication of CSR practices with those
of international counterparts, revealing that CICs are still in the nascent stage of
developing robust CSR norms (Liao et al., 2018), with disclosures often characterized
as limited, distorted, or incomplete (Lu et al., 2016; Liao, 2017; Wu et al., 2015).
However, these studies often presume a homogeneity in CSR practices across
domestic and international operations under a unified national and corporate CSR
governance framework, overlooking the nuanced dynamics of China’s distinct
domestic and international CSR strategies.
In contrast, some scholars like Maurin and Yeophantong (2013) have
contextualized China’s CSR regulatory framework within the backdrop of the “going
out” strategy, highlighting that China’s regulation of social and environmental impacts
resulting from overseas investments is influenced by the political imperative to
maintain a positive national image. In a similar vein, Lin (2023) proposes a bifurcated
regulatory framework that differentiates domestic CSR policies from those applied to
overseas activities. This dual-track system suggests a strategic alignment of China’s
outward CSR policies with international norms, which are normatively more inclusive
and stringent compared to domestic guidelines. This insight into the dual regulatory
framework underscores a critical gap in the literature: the differential impact of home
country institutions on CICs’ CSR practices abroad. Consequently, our primary
research aim is to assess the extent to which China’s specific overseas CSR policies
and regulations have affected CICs’ overseas CSR practices.
Another line of inquiry has focused on CICs’ CSR engagements specifically in
overseas contexts, often through project and company specific case studies (Fei, 2024;
Liu, 2021; Tan-Mullins et al., 2017; Zhu et al., 2019) in regions like Africa (Tan-
Mullins and Mohan, 2013; Tan-Mullins, 2020; Weng and Buckley, 2016). These
studies set CICs within broader institutional structures (both home country and host
country institutions) and provide a granular view of how CICs navigate complex
interplays with multiple external stakeholders, yet their findings can hardly be
generalized into consistent responses of CICs to CSR challenges abroad, but leading
to an inductive suggestion that CICs’ responses to CSR challenges are ad hoc and
varied. In this context, a comprehensive and systematic overview of CSR patterns
among CICs in the international market warrants close investigation that can organize
the myriad of variables into a manageable and meaningful framework for future
theoretical advancement. Our secondary research aim is thus to examine the extent to
which CICs might converge on or diverge from a prescribed overseas CSR pattern.
To answer these questions, we adopt an institutional and political economy
approach to develop our hypotheses, which then would be testified by a novel dataset.
One of the main reasons that has restricted comprehensive analysis of CICs’ overseas
CSR is the limited easily accessible structured data. To address this data limitation,
we focus on 50 top CICs and draw all the information regarding their overseas CSR
activities from CSR-related annual reports and information disclosed on corporate
websites. The collected information meticulously coded construct a unique dataset to
analyse patterns and variations in their overseas CSR engagement. This dataset not
only provides a foundation for systematic analysis but also represents a significant
contribution to the understanding of the evolving landscape of CICs’ overseas CSR
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
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practices. Given the exploratory nature of this study, a mix-method approach is
employed, combing content analysis and primary statistical tools.
Several interesting findings emerge. Firstly, a general overseas CSR pattern of
CICs emphasizing customer and community engagement is identified. Secondly,
coercive/persuasive pressures from the home state play a significant role in shaping
CICs’ CSR patterns with societal stakeholders, resulting in a high proportion of
philanthropic practices. Thirdly, concerning economic stakeholders, CICs exhibit
varying CSR practices but demonstrate stronger market-based approaches, influenced
by their internationalization degree. Thus, neither the exogenous path nor the
endogenous path alone is enough to explain the CICs’ overseas CSR development in
the latest years. A hybrid of political and economic rationales drives CICs’ overseas
CSR development, with the balance between them determined by stakeholder type and
internal business needs.
The remainder of the article is organized as follows. Section 2 displays the
research background by tracing the development of CICs and the associated CSR
challenges. Section 3 provides a detailed theoretical discussion and hypothesis
development. The methodology section outlines the employed mix-method approach,
and the result section discusses the main findings from our dataset analysis. Finally,
the article concludes with implications for managers and policymakers,
acknowledging the study’s limitations and suggesting future research directions.
2. CIC development and associated CSR challenges
CICs have witnessed exponential growth during the last two decades (MOFCOM,
2020). As shown in Figure 1, this journey can be outlined through three distinct phases:
exploring (1980–2000), growing (2001–2014), and maturing (2015–present), each
marked by significant milestones in international expansion and operational focus.
Figure 1. Evolution of CICs (1980–2020).
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
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State-owned firms led the exploring phase (1980–2000) by venturing beyond
traditional aid recipients and engaging primarily in labour-intensive construction work
with very limited design and consultancy services (Low and Jiang, 2003). Despite
securing 23,265 contracts worth US$ 86.7 billion in two decades, their competitive
edge was minimal, evidenced by a mere 4.6% revenue share among the top
international contractors by 2001 (ENR, 2001). It is during the growing phase (2001–
2014) that China’s entry into WTO and the “going out” strategy significantly bolstered
CICs’ visibility and market penetration. Their contract values and the average value
per contract saw remarkable increases, accounting for 17.2% of the market shared by
top international contractors at the end of 2014 (ENR, 2015), with Africa emerging as
a competitive stronghold where CICs held 49.4% of market share, followed by Asia
(20.5%) and the Middle East (19.2%). This era was also characterized by China’s
mercantilist approach to promote exportation through international contracting (Zhang,
2020), the introduction of preferential buyer’s export credit to facilitate foreign
expansion of CICs, and “pro-big” reforms of state-owned enterprises (SOEs) to
encourage Engineering-Procurement-Construction (EPC) contracting by large-scale
engineering conglomerates (Li, 2016). The BRI launched in 2015 is expected to give
the development of CICs another political impetus. However, the growth has lost its
momentum as observed in the second phase, suggesting that the development of CICs
might enter a new stage characterized by the so-called “development with high
quality”. This maturing or upgrading process (2015–present) could be considered as a
correction of the “blind” expansion of CICs (Zhang, 2019) with unintended
consequences, notably CSR challenges.
CICs traditionally have less strategic impetus to internalize CSR in their
international reach, due to the concentration of their operations in turnkey projects
According to the Department of Outward Investment and Economic Cooperation of
the Ministry of Commerce (RDBC, 2013), construction contracting and general
contracting (EPC) represented respectively 45%–46% and 47% of China’s all
international contracting by 2013, which minimizes long-term local engagements and
responsibilities. However, two actors do exert coercive pressures on them to respect
their CSR. On the one hand, the host government, as project proprietor, bears legal
responsibility for technical standards definition, environmental impact assessments,
and resettlement processes. On the other hand, the project financier can also specify
the conditions for social and environmental safeguards. It is thus worth noting that
during the rapid ascension of CICs, a notable part of necessary financing was provided
by Chinese financiers, who have been found imposing less stringent requirements on
corruption, social and environmental concerns, and procurement of goods (Weng and
Buckley, 2016). In line with the “equality” and “no strings attached” principles that
define China’s official stance towards global development financing, this approach
tends to externalize regulatory and supervision responsibility to project proprietor, and
risks opening the door for the instrumentalization of Chinese financiers and Chinese
companies by ruling elites, who would push forward pharaonic works and other
projects for their own political interests, especially in countries with social tensions
and weak institutions. Therefore, the rise of CICs has not been without its social and
environmental repercussions. A significant number of human rights abuse allegations
linked to Chinese businesses abroad, particularly in construction (BHRRC, 2021),
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
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underscore the pressing overseas CSR challenges and call for critical political and
business adjustments, which will be discussed in the next section.
3. Dual rationales for overseas CSR development
3.1. Political economy and the instrumentalization of overseas CSR to
seek political legitimacy
Historically, China has often been at the receiving end of norm diffusion,
consistently resisting the coercive imposition of norms and standards by transnational
actors (Lin and Esteban, 2023). In the realm of CSR, the diffusion of international
norms has undergone a localization process, through which CSR was defined
territorially and conceptualized as an “internal affair”, resulting in domestic CSR
norms infused with distinctive Chinese characteristics, including an uneven emphasis
on different CSR issues and selective adoption of international CSR norms (Bai et al.,
2015; Coni-Zimmer, 2017; Lin, 2010; Lusteau et al., 2018).
However, the localized appropriation of certain values and ideas underpinning
international CSR norms, while critical for justifying the regime’s internal legitimacy,
falls short in adapting to foreign contexts with different historical, cultural, and power
dynamics among stakeholders. This has triggered significant external legitimacy crises
(Park, 2023), undermining China’s efforts to construct a new identity as a “responsible
major country”. In response, Chinese policymakers have increasingly emphasized the
diplomatic importance of overseas CSR as a means of soft power (Buhmann, 2017;
Karakir, 2018). The imperative of upholding China’s positive image through the
implementation of overseas CSR reached an unprecedented level following the launch
of the BRI. In April 2016, President Xi Jinping urged Chinese companies to value not
only the economic returns from their foreign investment projects but also their
reputation as law-abiding and responsible entities (Xinhua, 2016). In August 2018, he
further called on Chinese enterprises to adhere to laws, comply with regulations,
prioritize environmental protection, and fulfil their social responsibilities,
emphasizing their role as “image ambassadors” for the BRI (Xinhua, 2018).
Consequently, international CSR norms have been relearned, revalued, and
reshaped, resulting in specific policies and regulations that exclusively govern the
sustainable overseas development of Chinese companies (Fei, 2024). These policies
and regulations constitute a parallel overseas CSR governance framework, separating
domestic and overseas CSR governance (Lin, 2023). This dual-track CSR governance
system allows the governance of domestic CSR to remain insulated from international
norms or standards that could potentially jeopardize internal political and social
stability, while facilitating their adoption to address overseas CSR controversies,
thereby enhancing China’s international image and bolstering the legitimacy of the
BRI (Lin, 2024).
In this context, it is misleading to assume that CICs, while conducting projects
abroad, would face the same home country institutional pressures as for their domestic
activities. Instead, China’s quest for a new identity as a “responsible major country”
has created additional pressures on CICs, which are expected to adopt subtly different
political-economic rationales overseas (Maurin and Yeophantong, 2013).
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
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Nevertheless, China’s stance toward international norms regarding overseas CSR is
nuanced. On the one hand, China’s domestic norms governing outbound practices
align more closely with international CSR norms compared to those governing
inbound practices. On the other hand, there exists a significant disparity across six
CSR dimensions in terms of the congruence between Chinese norms on overseas CSR
and prevailing international norms, with “high” congruence concerning corporate
overseas environmental responsibility and “low/moderate” congruence regarding
societal responsibility abroad (Lin, 2023).
The management of overseas societal commitment exemplifies the dilemma
China must overcome between external and internal legitimacy crises, especially when
embracing cosmopolitan values, such as human civil rights, requires reshaping
domestic CSR norms in a manner that conflicts with the interests and core values of
domestic actors (Lin, 2024). Therefore, while China has generally acknowledged the
importance of “widely accepted rules and standards” as a principle for holding its
national companies accountable abroad, the measures taken to enforce this principle
remain largely elusive. In practice, China’s policies toward overseas CSR overly focus
on deliverable outcomes guaranteed by unilateral benevolent corporate decisions,
which could be used to advance China’s normative power (Fei, 2024).
The political significance of overseas CSR could exert significant
persuasive/coercive pressures on SOEs, due to their political affiliation and
governance features, such as the two personnel systems, known as “bidirectional entry,
cross appointment” (Lin and Milhaupt, 2013). Moreover, the SOE reform under Xi
Jinping’s administration strengthens the Party’s dominance in major issues such as
production safety, employee rights, and social responsibilities (Beck and Brødsgaard,
2022). The separate “Party Work Department” oversees Party-building activities,
including fostering an altruistic corporate culture and aligning CSR with Party
principles, policies, laws, and regulations. This governance structure facilitates closer
interaction between SOEs and higher-level Party and government organs, ensuring
policy awareness and faithful execution of policies and objectives by SOE managers.
This top-down state-centric approach is expected to compensate for the weak
intrinsic CSR motivation among Chinese companies (Liu, 2021), but also potentially
skewing their CSR understanding and fostering a culture of “responsive social
responsibility” (Zhu et al., 2019) where CSR actions and disclosures serve more as
legitimacy tools than genuine commitments (Lin et al., 2016; Patten et al., 2014).
Chinese central leadership consistently approaches overseas CSR through the lens of
morality, contrasting it with corporate pecuniary interests. The political signal is
therefore clear: what the government expects from a better overseas CSR performance
pertains more to virtual reputational assets and ideational interests that go beyond
tangible material interests defined by entrepreneurial actors (Lin, 2024). This official
morality-centred view inadvertently induces companies to perceive CSR expenditure
as a necessary cost to gain political legitimacy and to justify their pursuit of pecuniary
interests. In this context, the emphasis on public image might lead to a narrow focus
on philanthropic activities (Tan-Mullins, 2020; Wang and Hu, 2017), which simply
receive greater media exposure and public attention than systemic approaches
addressing environmental and social impacts. As long as the overarching concerns for
the country’s image and reputation have driven the Chinese government to put
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
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exogenous pressures on CICs to improve their overseas CSR, CSR practices and
disclosure at company level would be instrumentalized to enhance public relations and
seek political legitimacy primarily at home, leading to the hypothesis (1): CICs, under
the home state coercive/persuasive pressures, might predominantly engage in overseas
CSR activities that align with governmental directives aimed at bolstering China’s
global image through targeted philanthropy and crisis management.
3.2. Internationalization and strategizing overseas CSR to consolidate
corporate competitiveness
The previous hypothesis stresses the inherently political nature of CSR in China
(Whelan, 2012), which further suggests that corporate CSR perceptions and initiatives
are largely external coercive driven and subservient to governmental commitments
(Lin et al., 2016; Luo and Wang, 2021; Xu and Liu, 2020; Zhang et al., 2024).
According to this view, Chinese construction SOEs are embedded in home-country
institutions characterized by their dependency on the state for financial and political
resources that are critical for their organizational resilience (Ma and Liu, 2024) and
internationalization success (Zhang, 2020). However, such a focus on the impacts of
home country institutions tends to present CICs as homogenous actors, and risks
overlooking the agency power of corporate actors in interpreting and implementing
national CSR policies during their overseas business activities. A contrary argument
thus emphasizes the principal-agency relationship between SOEs and the state (Liou,
2014), pointing out a considerable discrepancy between policies set in Beijing and the
actual practice of Chinese corporations on the ground. Under this perspective,
corporate attributes, such as resources, capabilities and organizational dynamics are
equally important in shaping corporate CSR perceptions and practices (Zhang et al.,
2024). Therefore, Chinese corporations, even SOEs, would not respond in the same
way to government directives.
Regarding CICs’ overseas CSR in specific, the internationalization degree is
argued to be such a corporate attribute for two reasons. In the first place, the
internationalization would reduce resource dependency on the home state. During the
last decade, CICs have notably secured projects in Africa and Latin America with
funding from non-Chinese, multilateral agencies, indicating a strategic pivot to
alternative financing sources (Brautigam and Hwang, 2019; Bersch and Koivumaeki,
2019; Zhang, 2021). This trend is partially attributed to the major reforms in China’s
foreign aid management initiated in 2013, aimed at enhancing risk control and project
approval processes (Yang and Yang, 2019). Consequently, China’s bilateral
government-to-government (G2G) lending has counter-intuitively levelled off since
the launch of the BRI (Kitano and Miyabayashi, 2020). Moreover, SASAC’s strategy
to make central enterprises “stronger and better” during the period of the 12th Five
Year Plan (2011–2015) also encourages SOE managers to pursue profits rather than
revenues, which incentivizes some leading CICs to move away from low profit
generating aid projects (Liou, 2014).
Another way that CICs have used to explore alternative sources of financing
during the internationalization is to set up finance companies themselves, thus
integrating financial functions within their conglomerate structures (Zhang, 2021).
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
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This initiative not only decreases their reliance on external banking systems but also
empowers them to engage in more ambitious and risk-oriented strategies, particularly
the Investment-Construction-Operation (ICO) model. This shift towards becoming
“developers” from merely “builders” starts around 2014-2015, reflecting a response
to the evolving demands of project proprietors and the internal drive for vertical
expansion within the industry (Yang, 2019). Officially supported by the Chinese
government as a viable means to advance the BRI (MOFCOM, 2019), ICO projects
have witnessed a noticeable increase in both the number and financial commitment
since 2015, reaching 72 ICO projects with a total corporate investment of US$ 24.49
billion in 2018 compared with only 53 projects worth US$ 2.93 billion between 2008–
2014 (Du and Chen, 2020).
The diversification of financing sources as well as the ambition of CICs to
reposition themselves in the value chain of international construction sector are
expected to influence their overseas CSR perceptions and practices. On the one hand,
leveraging international financial resources would require CICs to align with global
technical standards and international expectations in aspects of corruption,
environmental protection, and social engagement. On the other hand, under the ICO
model, CICs should behave as cooperative investors rather than mere service exporters
observed in traditional turnkey projects. This ongoing evolution of business model
marks a transition towards long-term investment and deeper local integration,
fostering the so-called “strategic social responsibility” (Zhu et al., 2019), which
recognizes CSR as a strategic asset for building resilience in response to systemic
crises (Ma and Liu, 2024).
In the second place, the internationalization drives a “dynamic embeddedness”
process that would make home country institutions less relevant (Lattemann et al.,
2017). More specifically, with higher internationalization degree, what CICs face is
not a unified CSR framework, but varied national CSR governance systems that
demand accountability primarily to local stakeholders. This “institutional duality”
(Jamali and Neville, 2011) underlines the influence of national institutional
frameworks on CICs’ “glocalized” CSR strategies (Ye et al., 2020), potentially
challenging China’s enforcement of its CSR standards, especially when CSR is
interpreted and governed differently in home and host countries. This amplified
institution-based view suggests that CICs’ overseas CSR perceptions and practices are
coproduct of home country and host country institutional pressures, with the latter’s
importance being contingent on the scale and diversity of overseas projects undertaken
(Sang et al., 2022).
Given the arguments presented above, the internationalization would moderate
the political nature of overseas CSR, and extend CSR beyond philanthropy to
encompass technical training, responsible sourcing, and community development,
aligning with international CSR priorities. However, the internationalization is not
expected to occur in the same pace and intensity for all CICs with different resources
and strategic visions. Considering the internationalization as integral part of the firm’s
business strategies that should be formulated “closely fit” for their resources and
capabilities (Zahra and Covin, 1993), larger CICs are positioned advantageously to
lead the strategic transformation and showcase a strategic adoption of CSR to maintain
sustainable competitiveness (Ma et al., 2016; Sang et al., 2022). Therefore, hypothesis
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
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(2) suggests that increased internationalization and prolonged overseas operations lead
to a stronger emphasis on multi-stakeholder governance, indicating that the scope and
intensity of a CIC’s CSR practices are shaped by its level of global engagement and
strategic vision.
4. Material and methods
To test these two hypotheses and to answer the question which CSR rationale and
pattern is more salient among CICs, the mixed‐method approach like that developed
in the works of Ye et al. (2019) is adopted in this article. Company reports and
corporate websites were used as the main sources to understand how CICs interpret
and practice CSR strategies in foreign countries, facilitated by content analyses with a
manual coding approach. Overseas CSR patterns are then presented by exploring how
different categories of CSR issues are practiced and valued among CICs with different
levels of internationalization. The details of the mixed methods are described as
follows.
4.1. Sample and dataset construction
As this article examines overseas CSR of Chinese construction firms, two sources
have been referenced for the sampling: the Top 250 International Contractors lists
compiled by the ENR, and the Top 100 Chinese International Contractors lists by the
CHINCA. The initial sample was composed of the top 50 CICs listed at least four
years out of six between 2015–2020 in both lists, which accounted for 64% of total
China’s overseas fulfilled turnovers accumulated during the period. While this
sampling technique considers both representativeness and data availability of CICs
with solid foreign presence, the selection itself may introduce a bias towards larger
firms with more resources and established CSR practices, potentially overlooking
smaller firms with different approaches to CSR.
There are two data sources for the content analysis. Company reports, including
CSR reports, ESG reports, sustainability reports, and annual reports are primary source
to analyse CSR actions and intentions. For companies pertaining to larger industrial
groups, the reports presented by their parent companies are also consulted. A total
number of 318 reports have been retrieved from company websites and the GoldenBee
Social Responsibility Report Database, covering 6 years (2015–2020). The chosen
period is justified by the maturing supervision mechanism of overseas CSR in China,
along with the changing business environment and strategic transformations of CICs
under the BRI in recent years. Another source refers to corporate disclosures about
CSR on their websites, which is increasingly used by researchers to detail CSR
activities and outputs (Noronha et al., 2013; Whelan and Muthuri, 2017). The reliance
on corporate reports and disclosures implies a notable risk of selective reporting,
where firms may highlight positive CSR actions while omitting less favourable
activities. However, it is important to note that this self-reporting itself is indicative of
the understandings and interpretations of CSR at the company level, such as the
relative importance and priority placed on different CSR dimensions and issues.
According to the distribution of turnover fulfilled of contracted projects provided
by National Bureau of Statistics of China (2024), a list of 141 countries, where CICs
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
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have carried out projects between 2015–2020, was used to extract country-specific
information from the data sources. In doing so, instead of examining and comparing
the overall CSR governance structure between CICs, this article focuses on specific
actions taken by each firm to address CSR issues in individual countries. By analysing
CSR practices of a same company in different localities, this article tends to provide a
more reliable demonstration of a firm’s systematic efforts towards different
stakeholders through multiple observations. The gathered information is then
organized into a preliminary text dataset for content coding, where each item describes
the operations and practices of a specific CIC in a particular country.
4.2. Content analysis
An analytical framework was developed to guide the content analysis (see Table
1) by specifying CSR dimensions and issues. Recognizing that different industry
sectors prioritize various CSR focus areas (Ali et al., 2017), both national and
international norms and guidelines on CSR in the construction sector were consulted
to identify widely accepted categorizations of CSR practices for construction firms.
This process resulted in six CSR dimensions, each describing corporate responsibility
toward a major non-shareholder stakeholder. Moreover, two broad categories emerged:
“economic stakeholders”, encompassing Customer, Supplier, and Labour dimensions,
and “societal stakeholders”, comprising Community, Environment, and Human Rights
dimensions. This distinction, as suggested by Werther and Chandler (2014), is
particularly important for the research aim of this study, as our political legitimacy-
seeking hypothesis posits a disproportionate disclosure of social CSR initiatives
beyond financial gains, while the strategic competitiveness-seeking hypothesis
suggests a greater focus on internal and value chain stakeholders, which directly affect
the financial returns and economic interests of the focal firms (Karlsson et al., 2018).
16 CSR issues are identified under these six CSR dimensions. Special efforts
have been made to distinguish philanthropy and public relations actions from deeper
engagement with stakeholders to test the assumed political legitimacy-seeking
motivation of CICs to conduct CSR. The novelty of our analytical framework lies in
its ability to distinguish initiatives towards specific stakeholders in terms of the degree
of engagement. By doing so, we go beyond the conventional classification of CSR
issues, deliberately separating less challenging, easily implemented “image brushing”
practices from more demanding shifts towards the so-called “multi-stakeholder
governance”. This nuanced approach provides a clearer understanding of how CICs
engage with different stakeholders and highlights the depth and authenticity of their
CSR activities.
Table 1. CSR dimensions, issues and sample actions of CICs’ overseas CSR communication.
Code
Dimension
Issue
Sample actions
CU
Customer
CU1: Customer
communication
Maintain communication with customers during the whole process; customers’
general satisfaction.
CU2: Project quality
and safety
Type and number of quality certification, rating, and labelling schemes; employ
advanced technology and machinery; initiatives to solve engineering difficulties
and improve efficiency; life cycle safety management; zero-incident ratio;
customer training.
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
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Table 1. (Continued).
Code
Dimension
Issue
Sample actions
SU
Supplier
SU1: Local contents
Localization of procurement; supplier training and knowledge transfers.
SU2: Supply chain
management
Transparent and standardized procurement procedure; anticorruption policies and
procedures; due diligence on supplier qualification; internal auditing.
LA
Labour
LA1: Local
integration
Comply with national laws and regulations and are consistent with applicable
international labour standards; localization of employees; observance of national
or religious traditions and customs; encourage multicultural work environment.
LA2: Training
Provide local workers with access to skills development, training and
apprenticeships, and opportunities for career advancement.
LA3: Occupational
health and safety
Develop, implement, and maintain an occupational health and safety policy;
provide adequate training to all personnel on all relevant matters; provide the
safety equipment needed; health care scheme; risk-control programs in place to
assist the workforce or their families regarding serious diseases.
CM
Community
CM1: Community
relation
Donation; disaster relief; urgency assistance; charity activities (poor, orphan);
sponsor cultural events.
CM2: Community
development
Skill training; building new facilities (school, clinic, church, sports arena, etc.);
funds and voluntary scheme.
CM3: Community
involvement
Establish channels, and mechanisms to communicate and hear from local
community members; respect rights to know; Prevention and mitigation measures
implemented in operations with significant potential or actual negative impacts on
local communities (respect and protect cultural heritage and customs)
EN
Environment
EN1: Green initiatives
Environment assessment; resource-saving design and plan, sustainable labelling;
initiatives to provide energy-efficient or renewable energy based products and
services (carbon emission); materials recycled.
EN2: Waste
management
Minimize construction dust and waste; control noise level; industrial waste
treatment; constant monitoring and accountability of environmental performance.
EN3: Biodiversity
conservation
Protection of natural habitats of animals and plants; restore the ecosystem.
En4: Environment
campaign
Voluntary work; public education.
HU
Human rights
HU1: Economic,
social, and cultural
rights
Prohibition of child and forced labour; non-discrimination and equal opportunities
to women and other vulnerable social groups.
HU2: Civil and
political rights
Recognize the importance of social dialogue institutions; respect at all times the
right of workers to form or join their own organizations to advance their interests
or to bargain collectively; inform representatives of the workers to jointly examine
significant changes in operation to mitigate any adverse impact on employment.
Under this analytical framework, the text dataset was manually coded
accordingly, which would classify each item into six dimensions with the 16 issues
attached. Each CSR dimension and issue was scored on a dichotomous scale. Thus, if
a CSR issue/dimension in the checklist was practiced and disclosed, it was coded as 1;
otherwise, it was coded as 0. It is worth noting that a CSR issue/dimension was scored
only if specific actions have been taken to address it or specific performance outputs
have been displayed (see Table 1 for sample actions). 150 items have been randomly
selected to be coded simultaneously by two independent coders with the assistance of
the qualitative data analysis platform NivoMiner. Inter-rater reliability assessed in
terms of Cohens’ kappa was 0.88, indicating an almost perfect agreement between
coders. The whole dataset was then coded. After dropping 8 CICs at this stage as none
of the six CSR dimensions was scored due to the poor quality of the information
provided, the final coded dataset is composed of 879 items describing the CSR
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
12
practices of 42 CICs. An excerpt is shown in Table 2. Each line is one item, describing
CSR practices in six dimensions for one CIC in one specific host country, ‘1’
represents CICs did that CSR dimension, and ‘0’ represents they did not conduct.
Table 2. An excerpt of the coded dataset.
ID
Company
Host Country
CU
SU
LA
CM
EN
HU
1
CCCC
Saudi Arabia
1
0
1
1
0
0
2
CCCC
Equatorial Guinea
1
0
1
1
0
0
3
CCCC
Malaysia
1
1
1
1
1
0
4
CCCC
Egypt
0
0
1
0
0
0
5
CCCC
Serbia
1
0
1
1
0
0
…
...
...
...
…
...
...
...
...
…
...
...
...
...
...
...
...
...
875
JXSZ
Rwanda
1
0
0
0
0
0
876
JXSZ
Myanmar
1
0
0
0
0
0
877
JXSZ
Mozambique
1
0
0
1
0
0
878
JXSZ
Uganda
0
0
1
0
0
0
879
JXSZ
Indonesia
1
0
0
0
0
0
1. The whole dataset will also include the record of CSR practices at the issue level.
4.3. Measurement for CSR patterns
CICs’ overseas CSR patterns are presented by exploring how different CSR
dimensions and sub-dimensional CSR issues are practiced and valued by CICs, and
how the internationalization degree might shape the perceptions and practices of CSR
at the company level. The frequency ratio of each CSR dimension (Fd) is calculated
to indicate CICs’ degree of engagement with different external stakeholders (see
Equation (1)), while the frequency ratio of each CSR issue (Fi) is calculated to indicate
CICs’ preferences to implement specific CSR issues in host countries (see Equation
(2)).
𝐹𝑑 =𝑁𝑑/𝑁𝑡 (d = 1, 2, ..., 6)
(1)
𝑁𝑑 represents the count of observations where a particular CSR dimension is
implemented, while 𝑁𝑡 denotes the total number of observations.
𝐹𝑖 =𝑁𝑖/𝑁𝑡 (i = 1, 2, ..., 16)
(2)
𝑁𝑖 represents the count of observations where a particular CSR dimension is
implemented, while 𝑁𝑡 denotes the total number of observations.
Both equations are applied to the whole dataset as well as the 42 sub-datasets
regarding the CSR practices of each CIC in the sample.
To explore further how the internationalization degree would shape the
understandings and the practices of CSR between sampled CICs, we will run a simple
regression analysis due to the exploratory nature of this study and the limited sample
size. The model can be specified as follows:
𝐹𝑖 = 𝛽0+ 𝛽1(𝐼𝑛𝑡𝑒𝑟𝑛𝑎𝑡𝑖𝑜𝑛𝑎𝑙𝑖𝑧𝑎𝑡𝑖𝑜𝑛)+ 𝜀
(3)
The dependent variable 𝐹𝑖 represents the frequency ratio of each CSR issue,
calculated in Equation (2). The main independent variable Internationalization is
firstly proxied by Internationalization scale, which is defined as the logarithmized
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
13
value of accumulated international turnovers between 2015 and 2020. This measure
captures the market position and corporate resources dedicated to construction
activities in international markets, and deemed to be a better metric than the proportion
of international turnovers in our case.
To further enhance the credibility of the regression results, robustness checks will
be performed using an alternative measure of internationalization: Internationalization
diversity. Unlike internationalization scale, which indicates the size and resource
abundance of each company, internationalization diversity refers to the number of
countries where each CIC has completed or is handling projects by 2020, introducing
thus the complexity of host country institutional environments as a possible channel
through which the internationalization might influence overseas CSR perceptions and
practices. The more countries a CIC operates in, the more challenging it is to manage
diverse institutional contexts, thereby increasing the likelihood of institutionalizing
and systematizing overseas CSR policies to reduce transaction costs.
5. Results and discussion
The comparison of frequency ratios across different CSR dimensions reveals a
consistent overseas CSR pattern among CICs, both at the aggregated and company
levels. Figure 2 illustrates that customer and community engagements are prominent,
with CSR practices in these dimensions disclosed in 68% (customer responsibility)
and 61% (community responsibility) of all observations. Labour responsibility is
highlighted in 41% of cases, while the remaining three CSR dimensions demonstrate
relatively lower importance. At the company level, none of the individual CICs
significantly deviate from this pattern (see Table A1 in the Appendix).
Figure 2. Frequency ratios of CICs’ practices in six CSR dimensions.
This CSR pattern, characterized by “two long legs”, is intriguing considering
CICs’ prioritization of economic stakeholders over societal stakeholders for their
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
14
business development. China Communications Construction Company (CCCC), the
largest Chinese international contracting company in terms of overseas turnovers,
provides an example. Since 2016, CCCC’s CSR reports have utilized a two-
dimensional matrix to evaluate over thirty CSR issues across eight dimensions,
including an “overseas responsibility” dimension, according to their “importance to
stakeholders” and their “importance for CCCC’s sustainable development”. Despite
the comprehensive range of issues addressed, CCCC’s self-evaluation, summarized in
Tables 3 and 4, consistently ranks “overseas (local) voluntary assistance” as the least
relevant to its sustainable development, with other overseas CSR issues also
considered of lesser importance except for “responding to national strategy”, while all
issues under the “excellent project” dimension receive high rankings, with “project
quality” consistently ranked at the top throughout the years.
Table 3. Ranking of overseas CSR issues by their importance for the sustainable
development of CCCC.
2016
2017
2018
2019
2020
Responding to national strategy*
2
5
6
8
-
Driving local employment
24
21
13
20
32
Localizing operations (procurement)
21
22
31
32
33
Overseas (local) voluntary assistance
29
35
28
30
37
Overseas (local) environment protection
26
10
34
22
26
Total number of issues ranked
34
35
35
35
38
*. Since 2017, it is called responding to BRI and was dropped off in 2020.
Table 4. Ranking of customer-related CSR issues by their importance for the
sustainable development of CCCC.
2016
2017
2018
2019
2020
Project quality
1
1
1
1
1
Safe production
8
7
1
2
-
Customer satisfaction
9
11
2
3
6
Technological innovation
5
8
8
6
4
Total number of issues ranked
34
35
35
35
38
Source: Author’s compilation from annual CSR reports of CCCC.
In this context, the high proportion of CSR practices targeting customers might
be attributed to an economic rationale and a competitiveness-seeking motivation,
supporting hypothesis (2). In contrast, the extensive disclosure of community
engagements, despite their lower ranking in strategic importance, supports hypothesis
(1) by indicating a drive for political legitimacy and corporate alignment with national
strategy as shown in Table 3. This nuanced approach to CSR showcases how CICs
navigate the interplay between economic ambitions and political expectations,
employing CSR as a multifaceted tool to engage with various stakeholders. Upcoming
analyses will delve into CSR practices divided into categories based on the nature of
stakeholder relationships, highlighting how CICs balance their commitments to both
societal and economic stakeholders.
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
15
5.1. CSR patterns with societal stakeholders
Considering community-related CSR practices (CM), our analytical framework
categorizes them into three types: Community relation (CM1) encompasses basic,
often short-term philanthropic activities; Community development (CM2) entails
initiatives with the aim of leaving a lasting positive impact on local social
infrastructure; and Community involvement (CM3) represents a comprehensive
commitment to respecting local community rights through effective communication
and mitigation strategies against potential adverse impacts (see Table 1). According
to hypothesis (1), a higher frequency ratio of CM1 is anticipated. To test this, a two-
dimensional matrix is constructed, where the vertical axis measures the frequency ratio
of CM1, and the horizontal axis measures the frequency ratio of combined CM2 and
CM3. Interestingly, out of the 42 sampled CICs, 38 have implemented and
communicated more CM1 practices compared to combined CM2 and CM3 practices
(see Figure 3).
Figure 3. Two-dimensional patterns of Community practices of CICs.
However, a more complex scenario emerges where several CICs demonstrate a
balanced approach between CM1 and more sustainable CM2 and CM3 practices,
indicating a notable variance among CICs in terms of their efforts in implementing
CM2 and CM3. This variance could be influenced by factors such as the degree of
internationalization, as suggested in hypothesis (2). Figure 4 thus incorporates the
accumulated overseas turnovers of individual companies from 2015 to 2020 and
provides a contextualized view of CM practices at company level, where CICs with
higher overseas turnovers are observed to place a greater emphasis on CM2 activities,
with the trend line suggesting an increase in such sustainable practices proportional to
the company’s overseas turnovers.
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
16
Figure 1. Patterns of Community practices of CICs.
The observed correlation is also supported by the statistical results of the
regression model using the logarithmized overseas turnovers of CICs as independent
variable, presented in Table 5. A positive and statistically significant correlation at a
1.2% significance level between corporation internationalization and CM2 practices
is found, partially supporting the hypothesis (2) that increased internationalization
fosters deeper community development initiatives beyond philanthropic activities.
Table 5. Results of correlative estimates between Community issues and corporate internationalization.
Dependent variables
CM1
CM2
CM3
CM1
CM2
CM3
Intercept
0.296
(0.274)
−0.233
(0.177)
0.001
(0.052)
0.310
(0.209)
−0.045
(0.140)
−0.004
(0.039)
Internationalization scale
0.055
(0.071)
0.121*
(0.046)
0.005
(0.013)
Internationalization diversity
0.119
(0.125)
0.167
(0.084)
0.015
(0.024)
R-square
0.015
0.147
0.004
0.022
0.089
0.010
Adjusted R-square
−0.010
0.126
−0.021
−0.002
0.067
−0.015
Observations
42
42
42
42
42
42
Standard errors in parentheses. *p < 0.05 **p < 0.01 *** p < 0.001.
Moreover, rather than positioning themselves solely as altruist philanthropic
donors, CICs with higher international turnovers justify their community development
initiatives as business enhancing solutions. Instances of such CSR practices include
China Wuyi’s construction of water ponds to facilitate local access to water in
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
17
exchange for resources for road construction (Wuyi, 2018), Gezhouba’s skill training
in Ethiopia coupled with purchasing vegetables from locals to ensure the project
team’s food supply (Gezhouba, 2019), and Three Gorges Group’s scholarship program
in Pakistan aimed at building local talent reserve while addressing the social impacts
of their hydropower projects (Three Gorges, 2020). In all these cases, community
development is justified by enhancing the operational efficiency and sustainability of
their overseas projects, thereby validating the strategic value and economic returns of
their practices, which were formerly propagandized for their one-way contribution to
the local community’s welfare.
However, CICs collectively face challenges in fully institutionalizing genuine
community involvement (CM3). Among even the most internationalized CICs, the
initiatives that promote participatory decision-making are rare. Instead, they often
employ a tailored approach, adapting their strategies to the specific context of each
country, locality, and project, encapsulated in the policy of “one country, one policy;
one place, one policy; one project, one policy”. This method places significant
responsibility on project managers to forge and sustain personal connections with local
stakeholders (Weng and Buckley, 2016), rather than institutionalizing structured,
transparent, and inclusive community engagement mechanisms. This situation
challenges the assumption that the complexity of institutional environments would
foster the institutionalization of CSR policies within the organization and explains why
the correlation between internationalization and CM2 practices turned out to be
insignificant once we substitute internationalization scale with internationalization
diversity as independent variable (see Table 5). The statistical gap underscores the
difficulty to go beyond the traditional project-based arrangement and the complexity
of transitioning to a governance culture that fully embraces genuine stakeholder
involvement when there is a lack of better understanding between human rights and
business among CICs. In fact, human rights policy does not emerge as a focal area for
CICs, irrespective of their degree of international exposure. The scarcity of human
rights-related practices underscores a systemic deficiency in involving societal
stakeholders directly in the formulation and execution of CSR initiatives, reflecting
CICs’ unilateral definition of the local communities’ rights and needs.
In summary, CICs’ CSR patterns with societal stakeholders exhibit three key
characteristics. Firstly, there is a prominent presence of coercive/persuasive pressures
from the home state, leading to a high proportion of philanthropic practices that is not
influenced by corporate internationalization. In other terms, independent from
corporate specific attributes, all CICs actively engaging in overseas projects, under the
pressures of home country policies, have considered the fulfilment of philanthropic
responsibility as the bottom line and diffused publicly relevant performance records
to gain domestic political legitimacy upon which their pecuniary interests would then
be pursued. Secondly, internationalization serves as a contingent factor affecting the
practice and disclosure of community development initiatives, with significant
variation among firms. However, not all dimensions of internationalization matter
equally. Specifically, our findings indicate that the scale of international operations,
rather than the geographic diversity of projects, significantly influences community
development initiatives. This leads to the final observation that is the
internationalization effect is limited in terms of systematic efforts to facilitate
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
18
communication and participation of societal stakeholders in the decision-making
process, both at aggregated and disaggregated levels. The next section will explore
whether these characteristics also define CICs’ CSR patterns with economic
stakeholders.
5.2. CSR patterns with economic stakeholders
In the realm of CSR targeting economic stakeholders, particularly customers, the
analysis reveals stronger economic motivations. The Customer dimension (CU) is
delineated into two main issues: Customer communication (CU1) and Project quality
and safety (CU2). CU1 is seen as a vehicle for maintaining customer satisfaction
through regular updates and adherence to contractual obligations, yet it is often
translated into a ceremonial practice aimed at bolstering media visibility and crafting
a favourable public image. Conversely, CU2 involves tangible efforts to elevate
project quality and safety through technological advancements and rigorous safety
protocols, potentially leading to prestigious quality certifications and accolades.
The comparison between these two issues, under a two-dimensional matrix, as
illustrated by Figure 5, demonstrates a significant dispersion of CICs within the matrix,
thereby challenging the assumption that customer engagement is predominantly a
public relation manoeuvre as hypothesis (1) suggests, which makes CICs
systematically favour the implementation of CU1 over CU2. This diversity indicates
a more complex approach to customer relations than previously assumed.
Figure 2. Two-dimensional patterns of Customer practices of CICs.
Support for hypothesis (2) however emerges from analysing the correlation
between the emphasis on CU2 and the degree of corporate internationalization, as
depicted in Figure 6.
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
19
Figure 3. Patterns of Customer practices of CICs.
Moreover, according to Table 6, it appears that CICs with a broader international
footprint (both in terms of turnovers and geographic penetration) are more inclined to
invest in and publicize initiatives related to project quality and safety as their
competitive advantages. This approach is validated by the experiences shared by Yang
Zhiyuan (CCCC, 2018a) and Alioune Badara SAMBE (CCCC, 2018b) considering
the key of CCCC’s successes in Middle East and Senegal, which highlight the
competitive edge gained by delivering exceptional project outcomes and reliability,
ultimately fostering client trust and securing further contracts. For instance, CCCC’s
achievements in the Palembang Light Rail project in Indonesia, which not only met
but exceeded client expectations, paved the way for securing additional, more lucrative
projects, despite of a bidding price higher than its competitors (CCCC, 2018c).
Table 6. Results of correlative estimates between Customer issues and corporate
internationalization.
Dependent variables
CU1
CU2
CU1
CU2
Intercept
0.589
(0.302)
−0.039
(0.223)
0.725**
(0.228)
−0.035
(0.163)
Internationalization scale
−0.033
(0.079)
0.126*
(0.058)
Internationalization diversity
−0.159
(0.137)
0.290**
(0.098)
R-square
0.004
0.105
0.033
0.179
Adjusted R-square
−0.021
0.082
0.009
0.158
Observations
42
42
42
42
Standard errors in parentheses. *p < 0.05 **p < 0.01 *** p < 0.001.
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
20
The emphasis on quality, innovation, and efficient management as crucial
elements for maintaining competitiveness in the global market is likely to influence
the interactions between prominent CICs and other economic stakeholders, including
suppliers and employees. Tables 7 and 8 present the corresponding statistical findings
of the patterns of supplier (SU) and labour (LA) practices among CICs.
In managing supplier relations, CICs are primarily driven by cost-saving motives
to ramp up local procurement for their expanding overseas projects. This approach,
termed “localized management”, occasionally shifts towards “regionalized
management” to circumvent material shortages in specific host countries. An
illustrative case is the China Railway Engineering Corporation (CREC), which set up
a diversified operation centre within its Congo (Kinshasa) project department to
optimize procurement from the Zambian and South African markets, thereby cutting
down procurement cycles and costs while boosting profits (CREC, 2021). However,
as Fessehaie and Morris (2013) contend, such strategies, while offering local suppliers
opportunities, often fall short of supporting their capacity building and upgrading. Our
findings, as demonstrated in Table 7, echo their observation, noting that although
CICs increasingly embrace supply localization as they expand internationally, there’s
an evident absence of structured institutional support for these efforts. Measures like
standardizing procurement processes, and implementing training, auditing, and due
diligence programs are underutilized, preventing the transformation of a price-driven
supply link into one built on trust-based relationships.
Table 7. Results of correlative estimates between Supplier issues and corporate
internationalization.
Dependent variables
SU1
SU2
SU1
SU2
Intercept
−0.175*
(0.076)
−0.037
(0.067)
−0.130*
(0.058)
−0.045
(0.050)
Internationalization scale
0.059**
(0.020)
0.018
(0.017)
Internationalization diversity
0.109**
(0.035)
0.046
(0.030)
R-square
0.181
0.025
0.200
0.055
Adjusted R-square
0.160
0.001
0.180
0.031
Observations
42
42
42
42
Standard errors in parentheses. *p < 0.05 **p < 0.01 *** p < 0.001.
Regarding labour procurement and management, the frequency ratio of labour
localization practices is found to be positively correlated with corporate
internationalization at the 0.1% significance level (see Table 8). The growing
emphasis on local procurement of human resources cannot be solely attributed to legal
requirements in host countries but also driven by economic rationales aimed at cost
reduction, operational efficiency, and overcoming visa restrictions on Chinese
personnel traveling abroad. For example, despite the Turkish government allocating
substantial labour quotas for Chinese workers, China Energy Engineering Corporation
(CEEC) opted for significant local employment in its Hunutlu project, reflecting a
broader market-driven approach to labour engagement (CEEC, 2020). Further,
internationalization has catalysed advancements in other labour practices. The
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
21
statistical analysis underlines this impact, with internationalization showing a
meaningful influence on labour practices (see Table 8). Key economic considerations,
such as the necessity for skill training to enhance cost-efficiency and the need to blend
local knowledge on European or American standards with Chinese managerial
expertise, underscore additional labour practices to enhance the integration and
involvement of local employees within the organizational frameworks of CICs.
Initiatives like skill training sessions for Indonesian workers in CCCC’s MRT Line 2
project (CCCC, 2018b) and the localization of management in operations of Anhui
Construction Engineering Group (ACEG) in Pakistan (ACEG, 2018) exemplify these
efforts.
Table 8. Results of correlative estimates between Labour issues and corporate
internationalization.
Dependent variables
LA1
LA2
LA3
LA1
LA2
LA3
Intercept
−0.372*
(0.172)
−0.159
(0.085)
−0.203
(0.182)
−0.242
(0.131)
−0.078
(0.120)
−0.175
(0.135)
Internationalization scale
0.156***
(0.045)
0.085*
(0.041)
0.105*
(0.047)
Internationalization diversity
0.283***
(0.078)
0.149*
(0.072)
0.227**
(0.081)
R-square
0.232
0.098
0.110
0.246
0.096
0.165
Adjusted R-square
0.213
0.076
0.088
0.227
0.074
0.144
Observations
42
42
42
42
42
42
Standard errors in parentheses. *p < 0.05 **p < 0.01 *** p < 0.001.
These efforts signify a departure from the arms-length market relationship with
local suppliers, fostering closer, more nuanced interactions with local labour forces.
Leading CICs have implemented various measures and initiatives, such as the Chinese
style “mentorship and apprenticeship” and cultural exchange programs, to cultivate
local talent, ensure workforce stability, and embed a sense of belonging among local
employees. Such measures not only facilitate the operational integration of local
workers but also contribute to CICs’ sustained competitive advantage in the global
market, reflecting a comprehensive approach to leveraging internationalization for
improving labour relations and project outcomes.
In summary, CICs’ CSR patterns with economic stakeholders exhibit two key
features. Firstly, CICs generally do not view their relationship with economic
stakeholders, particularly host country governments, from a systematic public
relations perspective. Secondly, when CICs engage in more overseas projects across
different countries and generate greater income from overseas operations, they
increasingly recognize the importance of win-win relationships with local labour and
value chain partners. This responsiveness, influenced by corporate internationalization,
is largely driven by economic incentives.
6. Conclusion
This study’s exploration into the overseas CSR activities of CICs unveils a
complex landscape where motivations for political legitimacy and strategic
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
22
competitiveness intertwine, guiding the development of CSR initiatives. It echoes
previous research on the “country-of-origin” effect, such as the selective focus on
specific human rights issues of Chinese multinational SOEs (Whelan and Muthuri,
2017), underscoring the significant role of home state pressures in shaping CICs’ CSR
focus, particularly towards philanthropy. However, contrary to a purely state-centric
view, this analysis reveals that CICs, while adhering to political mandates, also
adaptively pursue commercial interests, blending responsive and strategic social
responsibilities based on their level of internationalization. This dual approach allows
for a nuanced engagement with stakeholders, emphasizing economic rationale in
relationships with customers, employees, and suppliers, alongside political
considerations. This hybrid model of CSR, navigating between national expectations
and global market pressures, underscores the adaptive capacities of CICs in their
international operations.
However, due to the coexistence of political and economic rationales, CICs’
overseas CSR practices have not progressed as swiftly as their expansion into
international markets. Currently, CICs are positioned in the transition process from
Type I CSR, which focuses on altruistic corporate philanthropy—the common feature
of multinationals from developing countries—(Gugler and Shi, 2009) to emerging
Type II CSR, which links a company’s financial goals with its social goals – the
dominant form observed in leading Western-based international contractors (Lu et al.,
2016; Liao et al., 2017). In parallel, the current mode of international CSR
development advocates for Type III CSR, which emphasizes associative work, where
companies collaborate with other local actors to pursue jointly defined objectives. This
trend is based on the recognition of the limited social benefits when corporate
definitions of social actions are subordinated to economic efficiency criteria (Banerjee,
2008; Drebes, 2016; Jackson et al., 2020; Vogel, 2010). In this context, CICs not only
have not yet fully consolidated Type II CSR practices in foreign markets as their
western peers, but also lag behind the current trend in forming a genuine community
of shared benefits with multiple stakeholders. This gap underscores the need for CICs
to accelerate their CSR evolution to not only meet global standards but also to create
sustainable and inclusive value in the international arena.
The implications of these findings are multifaceted. For managers, the shift
towards building sustainable competitiveness from aggressively grasping international
market share signals a need for CICs to align their CSR practices more closely with
global standards. This convergence could foster a more strategic approach to CSR,
balancing its costs and benefits more effectively and encouraging a broader
stakeholder engagement model. The study also highlights and confirms the uneven
benefits of current CSR initiatives, with a tendency to prioritize contractually bound
stakeholders over others (Wu et al., 2015), suggesting a potential area for more
inclusive CSR strategies that better address the needs of local communities and other
non-contractual stakeholders. For policymakers, the exogenous home state pressures
outweigh the endogenous recognition of the strategic importance of certain CSR issues,
diverting CICs’ CSR efforts to the national image-building purpose. Given the
political affiliation between CICs and the Chinese government, the coercive pressures
from the home state will continue to be an important factor in promoting the
development of CICs’ overseas CSR. In this context, the Chinese government should
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
23
further clarify its demands on SOEs, encouraging them to be fully embedded in the
local society and to build open platforms for the locals to participate in the
identification of key CSR issues.
Despite providing valuable insights on intricate dynamics between political and
economic motivations, this study encounters specific limitations that pave the way for
future research directions. The concentration of SOEs in the sample restricts the
examination of corporate ownership as a factor influencing CICs’ overseas CSR
patterns, suggesting a valuable avenue for comparative studies between private and
state-owned construction firms. Additionally, the limited company sample hinders a
systematic assessment of relevant corporate intrinsic factors, other than
internationalization, that might influence their overseas CSR practices. Future
research could benefit from the inclusion of smaller CICs, especially with the
anticipated mandatory non-financial disclosures, to allow for more robust statistical
analyses. Another area ripe for exploration lies in the lack of a comparative analysis
with international counterparts. This gap limits the ability to discern whether the CSR
behaviours of CICs are distinctly Chinese or resonate with global patterns within the
construction industry. Conducting comparative studies between CICs and their non-
Chinese competitors could illuminate unique or shared CSR practices, offering deeper
insights into the global landscape of CSR in the construction sector. Furthermore, the
reliance on public corporate statements as the primary data source introduces potential
biases, highlighting the need for qualitative research methodologies. In-depth case
studies and qualitative analyses could delve into the nuanced processes behind CSR
strategy formulation and execution, uncovering the realities of CSR practice beyond
corporate disclosures. Such approaches would enable a closer examination of the
socialization mechanisms within CICs and the perceived impacts of their CSR
activities on local communities, offering a more grounded understanding of CSR’s
effectiveness and authenticity.
Funding: This research is a result of the project “China Horizons: Dealing with a
Resurgent China” (DWARC) (grant no. 101061700) funded under the European
Union’s Horizon Europe research and innovation programme. Views and opinions
expressed are however those of the authors’ and do not necessarily reflect those of the
European Union. Neither the European Union nor the granting authority can be held
responsible for them.
Conflict of interest: The author declares no conflict of interest.
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Appendix
Table A1. Frequency ratios of CSR practices in six dimensions at the company level.
Company
CU
SU
LA
CM
EN
HU
CCCC
81%
16%
58%
74%
35%
4%
PCCC
41%
9%
49%
87%
30%
8%
CSCE
86%
11%
64%
61%
19%
3%
CREC
79%
12%
35%
50%
15%
0%
CRCC
79%
10%
18%
38%
15%
3%
CEEC
77%
8%
52%
71%
19%
4%
SINOMACH
73%
9%
21%
64%
12%
0%
CNCEC
83%
4%
61%
48%
4%
0%
CPECC
47%
21%
65%
74%
59%
3%
MCC
67%
5%
57%
67%
19%
0%
CITIC
64%
0%
27%
73%
36%
0%
SEG
88%
13%
63%
38%
13%
0%
CNQC
86%
14%
43%
29%
29%
29%
CNOS
57%
0%
43%
14%
0%
0%
CWE
62%
8%
50%
81%
35%
8%
HEC
90%
0%
10%
20%
10%
0%
CBMI
65%
13%
48%
42%
10%
3%
CJIC
94%
12%
53%
82%
6%
0%
ZJINTER
89%
0%
22%
33%
0%
11%
GNERTEC
58%
8%
38%
69%
15%
0%
CET
62%
5%
43%
62%
14%
5%
NORINCO
75%
0%
31%
69%
13%
0%
TBEA
67%
0%
8%
50%
0%
0%
CNMC
58%
25%
67%
58%
33%
0%
SHANGHAI ELECTRIC
55%
0%
36%
64%
18%
0%
CGC
78%
6%
33%
50%
0%
0%
DEC
70%
13%
39%
43%
4%
0%
SCG
95%
0%
5%
29%
0%
0%
CJI
82%
0%
18%
55%
0%
0%
SPEZY
24%
6%
41%
94%
47%
6%
BCEG
31%
0%
25%
44%
38%
0%
CHICO
62%
15%
54%
92%
31%
0%
CGCOC
89%
0%
22%
44%
0%
0%
WUYI
50%
0%
33%
100%
33%
0%
SINOSTEEL ENTEC
67%
13%
40%
67%
13%
13%
YNCEGC
100%
0%
20%
30%
0%
0%
BUCG
75%
25%
33%
33%
0%
0%
JSCE
83%
0%
17%
28%
0%
0%
CATIC
44%
0%
19%
75%
0%
6%
Journal of Infrastructure, Policy and Development 2024, 8(8), 5729.
29
Table A1. (Continued).
Company
CU
SU
LA
CM
EN
HU
COMPLANT
28%
0%
17%
83%
11%
0%
ACEG
67%
0%
83%
50%
17%
0%
JWHC
89%
0%
11%
22%
0%
0%
