Developing a framework for the Diversification Mechanism and Financial Liquidity of the Construction Firms in the UAE
Document Type Conference Paper
Al Sayegh, N. & Sundarakani, B. 2016, 'Developing a framework for the Diversification Mechanism and Financial Liquidity of the Construction Firms in the UAE', 42nd Annual EIBA Conference Liabilities of Foreignness vs. the Value of Diversity, European International Business Academy, Vienna, Austria,
Abstract
The construction industry is an integral part of the to the UAE economy. The industry has been considered to be one of the key sources of the employment, the income and growth and contributing to approximately 14 %to the UAE's GDP (DED, 2014). Stakeholders within this sector has suffered greatly as a result of the global financial crisis proceeded by the Dubai financial crisis and many have diversified their operations in order to improve their capability to cope with financial distress. Prior empirical studies reveal inconclusive findings on the successfulness of these attempts and a comprehensive investigation into the effectiveness of diversification strategies and performance is lacking. This research is an attempt to fill a part of this research gap by examining the effectiveness of diversification strategies by combining information on firm diversification type, level and mode to establish their combined effect on financial liquidity. The proposed framework and the initial findings of the research will be useful for the construction firms existing in the UAE to plan for strategic decisions and to prepare proactive liquidity measures.