THE IMPACT OF INTERNATIONALIZATION AND DIVERSIFICATION ON CONSTRUCTION INDUSTRY PERFORMANCE

• Type: Article in International Scientific Journal
• Date: 2016

Authors

Isabel Horta (Author) FEUP; Magdalena Kapelko (Author) Other; Alfons O. Lansink (Author) Other; Ana Maria Camanho (Author) FEUP

Journal

Title: International Journal of Strategic Property Management

Vol. 20

Pages: 172-183

ISSN: 1648-715X

Publisher: Vilnius Gediminas Technical University

Indexing

ISI Web of Knowledge - 21 Citations

Scopus - 16 Citations

Scientific classification

FOS: Social sciences > Economics and Business

Other information

Authenticus ID: P-00K-JSH

DOI: 10.3846/1648715x.2015.1123201

Abstract (EN): 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.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 12