National Construction Industry Maturity Model using Macroeconomic Index

Abstract

Construction industry has specific leading role of national development. Products of construction are used as major infrastructures for human living and instrument of production for other industries. Effect of construction industry is enlarged especially in developing countries. It shows that investment of construction is important to provide background of economic growth, so it can be considered as leading investment. It has been analyzed with various methods in previous research that can support sustainable growth of developing countries.<br/> Purposes of recently papers are to understand correlation between construction industry and economic growth, and also give references of public policy by case study in specific regions. In spite of those efforts, there are problems to understand relationship of construction investment and economic growth. First, it is difficult to collect long-term observation of process in construction industry. To overcome this problem, several researchers analyzed specific country or countries in similar region with short-term observation. But those results are focused to comprehend relationship in sample cases. It is necessary to analyze economic index and construction industry data of multiple regions, for generalization and application in relationship of factors in various countries.<br/> For this reason, this research suggests generalized analysis using annual economic index of each country to understand correlation of economic growth and construction industry. For this, effect of specification in construction industry and national economic growth is investigated, and suggested construction industry maturity model discriminate status of each nation based on result of previous research about correlation between construction investment and regional economic growth. Also it tried to overcome lack of time-series observation by cross-sectional analysis in several time sections.<br/> From the result of analysis, correlation of construction investment and economic growth is changed with economic development. And regional factors are effects on this relationship. Landlocked developing countries are different with other developing countries, but small island developing countries show large difference between each small island developing country. In the view of comparative analysis, continent is one of the effective factors. <br/> The main contribution of this research is to suggest national construction industry maturity model to understand relationship between construction investment and economic growth. It uses macroeconomic index to reconfirm correlation of construction investment and economic growth, and also analyzes effect of regional specifications. Also, cross-sectional analysis tries to substitute time-series analysis to comprehend the correlation and status of development with several time sections. Lastly, the national construction industry maturity model supports comparative analysis and decision making of political benchmarking.<br/>