Embeddedness and collaborative venture networks for overseas construction projects

Finding competent collaborators while executing construction projects overseas is of paramount importance for project success. The partner choice and project performance cannot be understood only from an economic viewpoint since it is constrained by the firms' embeddedness in social relations. Based on this premise, this paper provides not only a theoretical explanation of the impact of structural and relational embeddedness on firms' economic behavior and outcomes, but also empirical evidence by analyzing collaborative cases jointly performed by Korean construction firms working overseas during the past 18 years. Three conclusions are drawn. First, the inter-firm network has scale-free network properties. Second, the network retained endogamic characteristics in that a great majority of smaller firms had worked with only one large firm, forming strong subgroups. Last, there is plausible evidence of the impact of structural embeddedness as well as relational embeddedness on the level of profit.