The Research On The Financial Risk Conduction Mechanism For Large-scale Construction Projects

As one of “the troika” of China’s economic growth, investment-led economic growth hasthe most significant effect. In order to curb the ravages of the financial crisis, investmentplans had been launched by China in2008and2012. Most of them had been invested in thepeople’s livelihood and the infrastructure industry, water, transportation utilities, many ofthem are large-scale construction projects. The financial risk of the project increaseddramatically with the expansion of the scale of the projects, conduction of financial riskbetween the various stakeholders in the project made the risk further exacerbated. There arehuge financial risks, economic risks and market risks. Once the risk break out will eventuallylead to serious financial consequences. Project risk management faces new challenges. Thecharacteristics of large-scale projects are huge amount of investment, long implementationcycles, high technology composited, number of enterprises and departments involved, withspecial resource requirements, occupies an important strategic position in the nationaleconomy and social development, permanent works, once started turned irreversible.Financial risk is the top priority of the risk management of large projects. Early-warning andprevention of financial risk of large-scale engineering projects, explore the financial risk ofsystem formation process and conduction mechanism has become the subject of urgentresearch.This Article is instructed by the Risk conduction theory, the financial control theory,project management theory, system theory. First,we defined the meaning of the financial riskof large-scale projects conduction, analysis the features of large-scale projects financial riskconduction, which is randomly, unexpected, dependence, the linkage and non-reversible;Second, we analysis the large-scale project financial risk conduction elements, includingsources of risk, risk flow, risk carrier, risk conduction path, risk threshold and risk subsystem;Third, we revealed the Mechanism of large-scale projects’ financial risk conduction and riskcharacterization; Fourth, we explored the financial risk of large projects the dynamic processof conduction and conduction law; Fifth, we put forward the key element of monitoring thefinancial risk such as monitoring of large-scale projects’ financial risk source, improve riskthreshold to delay the risks burst release, identification and control the financial risksconduction path, monitor the process of the risk, reduce the speed of the risk conduction, andcontrol the coupling of financial risk. Last but not least, we built the large-scale constructionproject financial risk conduction evaluation index system; take32companies which is mainbusiness in building in2008-2011financial data as a sample, using principal component regression analysis of the financial risk of large-scale projects conduction analysis ofempirical evidence.