Concentration in the international construction market

Kunhui Ye, Weisheng Lu and Weiyan Jiang

Construction Management and Economics, 2009, vol. 27, issue 12, 1197-1207

Abstract: With the involvement of an increasing number of contractors in the international construction market, venturing overseas has been fraught with fierce competition and considerable uncertainties. This underscores the importance of examining the extent to which the intensity of competition (IoC) for international construction business is moderate. Concentration is a conventional IoC measure. By synthesizing four major concentration methods including concentration ratio, entropy, Gini coefficient and the Herfindahl index, a new model for measuring moderate IoC is thus proposed. Using the 28 years ENR-based data of the top 225 international contractors (TIC 225) in the proposed model, the IoC for international construction business is found to be moderate, if the magnitude of the market shares occupied by the top four international contractors is 0.2735. The finding revises a popular view that international construction competition has been intensifying only since 2002. It is implied that the proposed model favours a better understanding of competition characteristics in the international construction market and provides new insights into the theories about concentration.

Keywords: International construction market; business concentration; intensity of competition; moderate competition (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (5)

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DOI: 10.1080/01446190903222429

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