Establishing interrelationships among risks in international construction joint venture (ICJV) projects using partial least squares structural equation modeling (PLS-SEM)

Purpose Effective risk management involves a clear understanding and appreciation of the nature and the complex interactions among risks in international construction joint ventures (ICJV) projects. This study aims to explore the risk paths in ICJV projects, given that previous studies have not given enough attention to this critical aspect of ICJV risk management. Design/methodology/approach A comprehensive literature review led to the formulation of a risk register containing 74 factors. Subsequently, 30 risk paths were hypothesised, and, in a survey, data were collected from 94 foreign and local partners. The data was analysed using PLS-SEM. Findings This study adopted the PLS-SEM and established 20 risk interrelationships. Specifically, host government-related risks, macroeconomic risks, legal risks, poor market conditions and unavailability of resources, among others, were found to impact the productivity of ICJV projects. These were found to affect ICJV projects through various risk networks, confirming the interdependency, rather than the independence of risks. Practical implications This study contributes knowledge by extending the scope of current risk management studies of ICJV project typologies by exploring risk paths using SEM. It is expected that, as found in this study, understanding the complex relationships among risks would contribute to the effective management of risks in ICJV projects by partners through the allocation of adequate resources. Originality/value This study improves on a major limitation of most ICJV studies where ICJV risks were identified and analyzed as independent risks. The failure to understand the interrelations among risk factors may lead to inaccurate risk assessment and flawed conclusions.