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The impact of multinational business diversification on the financial sustainability of construction firms in Korea

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  • The impact of multinational business diversification on the financial sustainability of construction firms in Korea
  • Lee, Sanghyo; Ahn, Yonghan; Shin, Sungwoo
  • Multidisciplinary Digital Publishing Institute


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Title The impact of multinational business diversification on the financial sustainability of construction firms in Korea
Similar Titles
Material Type Articles
Author(English)

Lee, Sanghyo; Ahn, Yonghan; Shin, Sungwoo

Publisher

[Basel, Switzerland]:Multidisciplinary Digital Publishing Institute

Date 2016-10
Journal Title; Vol./Issue Sustainability:vol. 8(no. 10)
Pages 14
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Financial Policy
Economy < Economic Administration
Holding MDPI

Abstract

This study investigated empirically whether multinational business diversification by Korean construction firms contributes to their financial sustainability using the vector error correction model. In this study, the current ratio and the debt ratio were used as proxy variables for financial sustainability. International construction orders and domestic construction orders were used as proxy variables for multinational business diversification for the analysis. Of the models used for analysis in this study, Model A used the current ratio and international and domestic construction orders, and Model B used the debt ratio and international and domestic construction orders. The time-series data utilized consisted of the quarterly data from Q1 of 2001 to Q4 of 2015. The results of the analysis imply that an increase in international construction orders undermines the financial viability of construction firms because of a decrease in the current ratio and an increase in the debt ratio. (The rest omitted)