Effect Analyses of Internal Competency and Market Conditions on the Contractors' Overseas Diversification Strategy

Abstract

With the importance of international construction industry, the market concentration of Korean construction contractors to the Middle East and Asia market have been raised as the main issue of the construction industry. Many previous studies have been researched diversification strategy for the solutions, however, there are still debates whether diversification strategy has positive or negative effects on the performance. In this research, limited consideration of a complex relationship between diversification strategy and its related factors such as internal competency and market conditions is regarded as the main problem of previous studies. So this research aims to study the relationship diversification strategy and performance of contractors with consideration of internal competency and market conditions complexly. The methodology for this study is mediation analysis and Moderated Multiple Regression (MMR). Hypotheses are constituted three groups - Hypothesis of Direct effects, Hypothesis of Mediation effects, Hypothesis of Moderation effects. The result shows that direct effects and mediation effects between diversification strategy and performance were unclear, whereas moderation effects were identified significantly.