International Trade in Services.pdf - DSpace at Khazar University

Building Empires Overseas 185
Rights Watch 2009). These workers save parts of their salaries and transfer them to
families back home. The remittances are used for consumption, family formation,
and investment in homes, children’s education, and the establishment of small
companies (Ratha and Xu 2008). The economic impact from these resources is
considerable in many poor countries, and the construction sector’s contribution is
noteworthy because of the sheer number of foreign workers.
Developing countries host a growing number of homegrown
multinationals in construction services
The number of foreign companies that operate in any given market reflects several
factors, including the host market’s openness to trade and investment, the sophistication
of local competitors, the size and profitability of the construction market,
and the availability of human capital. Recent firm-level data show that some companies
in large developing countries are growing rapidly and have broken into the
list of the top 225 international contractors (ENR 2008). The list is dominated by
companies in OECD countries and China, but also includes companies in Brazil,
Egypt, India, Kuwait, Lebanon, FYR Macedonia, Pakistan, Russia, Saudi Arabia,
Turkey, and the United Arab Emirates. The top 225 companies generated
US$310 billion in revenue in 2007 from projects outside their respective home
countries. The Chinese construction companies have the largest market share of
foreign contractors in Africa (27 percent) and the second largest share in Asia
(17 percent). In 2003, China’s 48,688 construction companies employed 24.1 million
workers (Corkin and Burke 2006). Turkey also has a particularly successful
export-oriented construction service sector, which includes a 10th of the top
international contractors.
Figure 6.4 plots the number of these companies that are present in various
countries. Some trends can be discerned. First, large hydrocarbon exporters, particularly
countries in the Persian Gulf region, enjoy a significant presence of
foreign contractors in their relatively small economies. Second, many of the members
of the Association of Southeast Asian Nations also have a relatively large
number of international contractors relative to the size of their economies. Third,
African countries appear to be open markets because many of them host a relatively
large number of foreign contractors. Fourth, almost all high-income OECD
countries host a relatively lower number of large foreign contractors than the size
of their economies would indicate. France, Germany, Italy, Japan, the Republic of
Korea, the Nordic countries, Spain, and the United States are all in the lower, outer
limit. Finally, all 144 countries and territories shown in figure 6.4 host at least one
foreign contractor, which indicates that the great majority of the world’s countries
are open to some form of foreign commercial presence.