The impact of internationalization and diversification on construction industry performance

Isabel M. Horta*, Magdalena Kapelko, Alfons Oude Lansink, Ana S. Camanho

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

15 Citations (Scopus)

Abstract

This paper investigates the impact of internationalization and diversification strategies on the financial performance of construction industry companies. The results obtained can guide the design of strategies to pursue company growth and achieve competitive advantage. The evaluation of companies’ performance is based on the use of the Data Envelopment Analysis technique to aggregate financial indicators using optimized weights. The impact of internationalization and diversification on company performance is explored using truncated regression, controlling for the effect of contextual factors such as company age, size and time. Data Envelopment Analysis and truncated regression were complemented with bootstrapping to ensure the robustness of the results obtained. The activity of Portuguese and Spanish contractors in the period 2002 to 2011 is used as case study. The empirical results show that internationalization has a positive impact on financial performance, although this effect is only statistically significant for Spanish contractors. Diversification has a nonlinear relationship with performance, benefiting companies with either a small number of core activities or companies with a broad scope of activities.

Original languageEnglish
Pages (from-to)172-183
JournalInternational Journal of Strategic Property Management
Volume20
Issue number2
DOIs
Publication statusPublished - 2 Apr 2016

Keywords

  • Bootstrap truncated regression
  • Construction industry
  • Data envelopment analysis
  • Diversification
  • Internationalization

Fingerprint Dive into the research topics of 'The impact of internationalization and diversification on construction industry performance'. Together they form a unique fingerprint.

Cite this