A preliminary study on a country risk analysis for international construction

Kang Wook Lee, Wooyong Jung, Seung Heon Han

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

International construction projects are often exposed to various and complex risks related to the political, economic, social, and cultural issues of host countries. These factors usually have negative effects on the cost and schedule performances. Despite this, most previous research on international construction has focused on risk at a project level rather than a country level. In addition, the current country risk (CR) indices that are supported by financial institutions cannot effectively reflect the specific features of the construction industry. Accordingly, this research aims to conduct an analysis of CR that takes into account the nature of international construction. For this purpose, we first used a comparative literature review to develop a hierarchy for assessing CR levels. We then attempted to indirectly evaluate individual risk factors using 51 types of secondary data. We integrated performance data from 1,223 projects conducted by Korean contractors in 33 countries to construct a CR database. Next, diverse statistical techniques were used to conduct a CR analysis. In particular, a multiple regression analysis was utilized to investigate the causal relationships between risk influencing factors and profit performances. The results revealed the critical risk factors for each country group and indicated the quantitative effect they had on profit performances. The analysis outlined can provide practitionerswith an opportunity to consider CR in the context of the construction industry.

Original languageEnglish
Title of host publicationISEC 2011 - 6th International Structural Engineering and Construction Conference
Subtitle of host publicationModern Methods and Advances in Structural Engineering and Construction
EditorsSiamak Yazdani, Sai On Cheung, Amarjit Singh, Nader Ghafoori
PublisherResearch Publishing Services
Pages299-304
Number of pages6
ISBN (Electronic)9789810879204
DOIs
Publication statusPublished - 2011 Jan 1
Event6th International Structural Engineering and Construction Conference: Modern Methods and Advances in Structural Engineering and Construction, ISEC 2011 - Zurich, Switzerland
Duration: 2011 Jun 212011 Jun 26

Publication series

NameISEC 2011 - 6th International Structural Engineering and Construction Conference: Modern Methods and Advances in Structural Engineering and Construction

Other

Other6th International Structural Engineering and Construction Conference: Modern Methods and Advances in Structural Engineering and Construction, ISEC 2011
CountrySwitzerland
CityZurich
Period11/6/2111/6/26

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All Science Journal Classification (ASJC) codes

  • Building and Construction
  • Civil and Structural Engineering

Cite this

Lee, K. W., Jung, W., & Han, S. H. (2011). A preliminary study on a country risk analysis for international construction. In S. Yazdani, S. O. Cheung, A. Singh, & N. Ghafoori (Eds.), ISEC 2011 - 6th International Structural Engineering and Construction Conference: Modern Methods and Advances in Structural Engineering and Construction (pp. 299-304). (ISEC 2011 - 6th International Structural Engineering and Construction Conference: Modern Methods and Advances in Structural Engineering and Construction). Research Publishing Services. https://doi.org/10.3850/978-981-08-7920-4-S1-R07-cd