The internationalization of British construction companies 1990-96: an empirical analysis

The internationalization of British construction companies is not a new phenomenon. A recent stated aim of some of the larger companies has been to increase their overseas activities in an attempt to counteract some of the problems within the domestic construction market. This paper examines the international performance of British construction firms during the period 1990-1996, and is based on a questionnaire survey of senior executives of the largest British construction companies in an attempt to analyse their perceptions of the overseas market. The survey was concerned with the companies' general views, reasons, objectives, conditions, location and future expectations with regard to their overseas operations. The principal findings indicate that British firms had increased their overseas activities during the study period. However, despite theory to the contrary and relatively high levels of construction demand in some developing countries, they had tended to conduct the major share of their overseas work in developed countries. The reasons given for this bias were that developed countries provided: a secure environment in which to evaluate risks; financial security; and less corruption. The results suggest further that shareholder influence is an important factor affecting the respondent companies location overseas. It was concluded that while market demand is a factor for overseas location by British construction companies, it is only one of many.