Diversification by the largest US contractors

作者：Kim Hyung Jin^*; Reinschmidt Kenneth F

来源：Canadian Journal of Civil Engineering, 2011, 38(7): 800-810.

DOI：10.1139/L11-056

• construction markets
• market diversification
• strategic planning
• risk management
• risk attitude
• firm growth
• ENR top 400 contractors

Market diversification may be a corporate strategy for risk management, for firm growth, or both. The purpose of diversification, either reduction of market risks or growth of revenues and profits, affects a contractor's selection of market sectors to enter. Diversification into different sectors affects the contractor's portfolio of business and its financial performance. The current study performs an empirical analysis of contractors' diversification using US construction industry data published by Engineering News-Record (ENR). The study identifies (1) cross-correlations between market sectors; (2) the possible reasons for diversification by contractors; (3) diversification patterns by the contractors; and (4) differences in performance among the contractors classified by diversification strategy. These empirical findings may be of assistance to contractors in the development of their own diversification strategies.

• 出版日期2011-7