Density dependence in the Chinese construction industry: Focus on mortality of Jiangsu Province (1989‐2007)

Abstract

Purpose

The purpose of this paper is to test the density dependence theory and explain the deep changes that the Chinese construction industry is experiencing. Focusing on both organizational level and industry level, it aims to identify the factors and to show how these factors affect the mortality of the Chinese construction companies.

Design/methodology/approach

The Jiangsu construction industry is chosen as a proxy of the Chinese market. With the event history analysis method and life history data on all companies known to have operated during the period 1989‐2007 in Jiangsu, an expanded Cox model is established to achieve the purpose.

Findings

The construction industry level evolution plays an important role on exit rate of construction companies; however, this effect does not conform with density dependence as expected, and it interacts with organizational age. Besides, age and size of organizational level, and macro environment also act on mortality.

Research limitations/implications

Owing to the difficulty in data acquisition, only 19 years of the Jiangsu construction industry have been reported here, which may not provide the whole picture of the evolution process. Furthermore, the different ending events, such as disbanding and merge, have not been identified, which may affect the results to some extent.

Practical implications

The paper provides a new perspective to analyze the evolution of the Chinese construction industry and the mortality of construction companies.

Originality/value

This is the first article that applies the density dependence theory to analyze the evolution process of the construction industry. It is also the first attempt to analyze the interaction of density, macro factors and organizational age, which is a contribution to the organizational ecology theory and the study of construction industry development.

Citation

Yang, H., Chan, A.P.C. and Li, Q. (2010), "Density dependence in the Chinese construction industry: Focus on mortality of Jiangsu Province (1989‐2007)", Engineering, Construction and Architectural Management, Vol. 17 No. 6, pp. 563-580. https://doi.org/10.1108/09699981011090198