Abstract
Recently, domestic construction market has been depressed due to poor housing market and declining volume of public project, while overseas market continues to grow. Construction market is steadily expanding in Middle East and Asian region, and yet, domestic construction firms have been relying heavily on the Middle East for business opportunities. This study examines a relationship between changing domestic and overseas construction market environment and the volume of overseas construction projects in Middle East and Asia, in order to examine changes in business portfolio. The analysis period is between January 1991 and December 2010, based on monthly time-series data, using VECM (Vector Error Correction Model). The analysis results suggested that while domestic and Middle East construction markets may substitute each other, domestic and Asian construction markets were more conformed. On the surface, it seems high oil price has brought many business opportunities for domestic companies in the Middle East, but in fact, the domestic market is more adversely affected by high oil price. That is, domestic construction companies are taking projects in the Middle East to mitigate short-term financial hardships, rather than with a long-term business strategy and vision.
