Factors Influencing International Market Selection for Indian Construction Firms

Abstract

An appropriate market selection is a key element in the internationalization of firms. Although international market selection has been widely studied for manufacturing, banking, and other sectors, there has been little attention to the construction industry, particularly for firms from developing countries like India. This study fills this gap by identifying important factors that influence the international market selection by examining the market entry choices of 29 international construction firms of Indian origin across 106 countries. A total of six hypotheses were developed and tested on the basis of the predictive capacity of logistic regression analysis, and the results were validated using a questionnaire survey. The findings revealed that construction firms prefer to select host countries that have high market potential and a low-risk rating. Interestingly, geographic and cultural distance is not a barrier to Indian construction firms’ international market selection. Concerning firm-specific factors, experienced construction firms are more willing to participate in the international market, and the size of the firm is not a deciding criterion for international market selection. Comparison of these results with data from similar developing countries indicates that factors influencing international market selection vary from country to country. This study can be of notable informative value to practitioners, small-scale firms, and international aspirants.

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