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TIMING OF ENTRY BY MALAYSIAN CONSTRUCTION FIRMS INTO THE INTERNATIONAL CONSTRUCTION MARKET

Published on Jan 1, 2011
Che Maznah1
Estimated H-index: 1
,
Mat Isa1
Estimated H-index: 1
+ 3 AuthorsSiti Rashidah Mohd Nasir2
Estimated H-index: 2
Abstract
Recent globalization era has great consequences to the construction industry worldwide and it is frequently transforms into creation of new emerging markets. Going international is commonly understood as a strategic process of market entry decision through which a firm moves from operating purely in its domestic market into the international market. Focusing on the entry timing is one of the important dimensions in the process of internationalization of Malaysian construction firms. It involves the need to balance the early entry risk and the problems in losing opportunities as a result of late entry. In securing the position in the international market, Malaysian construction firms need to consider the influence of numerous factors both internal and external to the firms and decide when to enter a market. The main aim of this paper is to identify the entry timing strategy and the factors involved in the entry timing decision in internationalization process of Malaysian construction firms. Responses were received from thirty one (31) Class A and Grade 7 construction firms to obtain their opinions on the entry timing strategies in exploring international market. Empirical results on the entry information show that firms with medium level of internationalization capabilities and resources preferred to enter new market as the late entrants in their entry timing decision. On contrary, construction firms with vast experience, huge resources and great capability and expertise decided to enter the foreign market earlier. The findings also indicate that firm‟s capabilities, firm‟s resources availability and market environment were the most influential factors involved in the international market entry decision. Increasing firm‟s performance, firm‟s relationship with host country and increasing success rate were rated the most substantial features in firm‟s capabilities. Whilst satisfying capital requirement, lowering risk and more flexibility in decision making were the most considerable aspects in the firm‟s resource availability. Moreover, political stability of host country, status of competitors in host country and economic system in host country were amongst the most significant factors in market environment. This study is very relevant to the Malaysian construction firms as it illustrates the determination of entry timing and consideration of factors influencing the success of entering the international construction business and hence enhancing the firms‟ competitive advantage across national borders.
  • References (18)
  • Citations (4)
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