International Journal of Developing and Emerging Economies (IJDEE)

EA Journals

Impact of Globalization on Sustainable Implementation in the Construction Industry: Dynamics of Construction Tender-Price Volatility


Construction infrastructure plays a crucial role in development, bringing significant implications for resource utilization. Henceforward, specific measures for alleviating challenges associated with sustainable construction become crucial-general arguments of good industry practice. Construction-sector sustainability is increasingly important in developing countries, and threats of globalization amid construction-tender price volatility require immediate action. The purpose of this paper is threefold. The first is to investigate, through a literature review, the indicators of globalization concerning the construction sector. The second intention is to evaluate the empirical impacts of globalization on the construction sector with a focus on the derivation of construction tender-price. Thirdly, the study intends to separate the contributions of foreign direct investment (FDI) to global integration for construction sustainability. The study adopts qualitative and quantitative approaches that follow a case study and causal research design to explore and understand decisions and opportunities regarding construction-tender price inflation. The study utilizes content, thematic, and statistical methods for data analysis. The study finds that construction tender prices increased by an average of 49.7% per annum for periodic maintenance of feeder roads between 2012 and 2021, with varying correlations to globalization indicators. The research highlights notable disadvantages of foreign direct investments in the construction sector through the emergence of foreign firms in developing countries. The drawbacks include instigating unfair competition, initiating adverse knockout effects on local firms, exterminating local firms, and perpetuating corruption. In addition, the study identifies areas requiring attention to address the impacts of globalization in the construction sector. Critical areas include legislating procurement controls that protect local firms and improving the qualifications and competencies of local firms. The study further underscores mitigation measures against the adverse effects of foreign firms in the construction sector. These measures include providing training to local firms, managing the nature and type of competition, managing the nature and type of competing firms, and building the capacity of local firms.

Keywords: Foreign Direct Investment, Globalization, construction sustainability, tender price variableness, the construction sector

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