Governing local sourcing practices of overseas projects for the Belt and Road Initiative: A framework and evaluation

Abstract

A unified framework is proposed to investigate the ex-post factors of local sourcing practices in overseas projects for the Belt and Road Initiative, which includes twelve governance factors in four dimensions, i.e., coordinated adaptation, control and safeguarding, incentives and payment structure, and policies and regulations. A fuzzy Decision Making Trial and Evaluation Laboratory (DEMATEL) approach is applied to evaluate the inter-relationships among the factors. The results indicate that relational governance mechanisms such as trust building play a prominent role in implementing local sourcing practices while formal governance mechanisms such as country-level policies and regulations are the precondition for relational mechanisms.