Market demand and the duration of business projects: the housing industry

Kostas Axarloglou and Stefanos Zarkos
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Kostas Axarloglou: Department of International Economic Relations and Development, Democritus University of Thrace, University Campus, Komotini, Greece, Postal: Department of International Economic Relations and Development, Democritus University of Thrace, University Campus, Komotini, Greece
Stefanos Zarkos: ALBA Graduate School of Business, Vouliagmeni, Greece, Postal: ALBA Graduate School of Business, Vouliagmeni, Greece

Managerial and Decision Economics, 2010, vol. 31, issue 7, 477-487

Abstract: In this study, we propose that companies strategically choose to pursue projects of certain duration according to the fluctuations in market demand conditions. During a market upturn, when more business opportunities are available, companies choose short projects, committing thus their resources for a short period of time and so to better exploit the upcoming business opportunities. On the other hand, in a market downturn projects of longer duration are preferable, since they protect the company from the consequences of adverse market conditions. Finally, these insights appear relevant at least in the US housing industry, where builders pursue longer building projects during the market downturn and shorter ones during the market upturn. Copyright © 2010 John Wiley & Sons, Ltd.

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:31:y:2010:i:7:p:477-487

DOI: 10.1002/mde.1505

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