Internationalization Process of Russian Construction Industry: Inward Investments Perspective

Zusammenfassung

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Inward investments as the cornerstone of the entry mode choice are still considered a frontier issue within the field of internationalization - as judged from the academic interest as well as from the numerous articles published in scientific journals. Despite considerable progress in later years in formulation of theories, many weaknesses still exist within this field. A further development of theory is therefore needed. Nowadays emerging markets show the greatest activity in the field of internationalization, e.g the Russian market, which is considered by most potential entrants as a huge opportunity. The methods of entry and models of operations of international contractors in the Russian market, based on the investment decisions, are investigated in this paper.

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Internationalization Process of Russian Construction Industry: Inward Investments Perspective

Introduction

Not many studies regarding construction companies' processes of internationalization exist. Most of them are related to the experience of a narrow set of construction firms of national origin, e.g. British (Crosthwaite 2001) or Chinese (Pheng/Hongbin, 2006). In the recent years many construction companies from Finland, Germany, Russia, Turkey as well as other firms from developed and emerging economies countries have started to enter foreign markets. Therefore, analysis of their activity, motives for internationalization and success factors in the foreign markets are of interest for the researcher.

The aim of the present article is to determine the factors influencing the operations of international (predominantly European) construction companies in foreign markets with a focus on the Russian market. In turn, that requires critical evaluation of the basic conditions and methods of application of key theories of internationalization in the construction markets of developing countries. The research objectives are: to survey the contemporary theory of internationalization and its application to construction industry; to study the internationalization process of European construction companies and their entry decisions toward Russian market; to reveal the factors of success in the internationalization process of large construction enterprises entering Russia.

This research was conducted through in-depth personal interviews with chief executives and middle managers of multinational enterprises' (MNE' s) subsidiaries in Russia and Russian construction enterprises. The research was based on a case study approach. The works by Bartlett and Ghoshal (2008), Crosthwaite (1998, 2001), Gunhan and Arditi (2005), Helfat and Lieberman (2002), Hitt (2006), Whitelock (2002), Tsang and Yip (2007), Yu (2007) and many others were used in thi...

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