Relationship between degree of internationalization and construction firm's financial performance

Internationalization has emerged as an important business strategy for numerous construction organizations in recent years. There are disadvantages and benefits for internationalization. The relationship between degree of internationalization (DOI) and financial performance for construction companies and a literature review indicated that few models existed and those that did were problematic as they did not address the full complexity of internationalization. Firstly, this paper introduces a multidimensional measurement of the DOI of construction firms. Furthermore, the relationship between the DOI and financial performance for construction firms will be empirically examined through the Spearman Rank Correlation Coefficient. This study indicated a negative relationship between the degree of internationalization and firm’s financial performance in the construction industry. Through studying the conditions under which internationalization may not lead to higher performance, this research also offers some important practical implications for strategic decision making for construction companies that are contemplating or reconsidering an international expansion strategy.