Causes of Bad Profit in Overseas Construction Projects

Abstract

International construction projects do not necessarily produce a high level of profit, as opposed to what is generally expected of high-risk international attempts. Overseas construction projects tend to have various risk factors that can diminish project profitability. This paper provides a comprehensive hierarchical framework to investigate the cause-and-effect relationships of various profit-influencing factors for international construction projects. After long-term profitability trends are analyzed based on a total of 3,487 international projects performed by Korean global contractors during the last 4 decades, case surveys of 126 overseas projects are conducted to draw the criticalities of each factor and to develop a hierarchical framework. An in-depth comparative case study of 20 additional international projects is also performed to verify the applicability of the hierarchical framework. Finally, we present significant distinctions between successful and failed projects from the comparative case study.