The Ethiopian construction industry has been busy with building roads and construction ofrnnew buildings in the capital, Addis Ababa and across the country in the past decade or so, at arnlarge scale. These constructions are undertaken by both local and international contractors.rnHowever, it has been observed that the performance of local contractors is by far at a lowerrnlevel than the international contractors. International contractors deliver the product in time,rnat the given cost and at an acceptable quality way beyond comparison with those delivered byrnthe local contractors, posing the question: what are the factors that affect the performance ofrnlocal and international contractors resulting in such differences in there deliverables?rnBased on review of literature, a total of 35 factors has been selected that influence both localrnand international contractors and another 15 factors were also included which influencerninternational contractors in particular. The identified factors were categorized into groupsrndepending on types of performance process. Statistical analyses of their significance wererncarried out based on the questionnaire survey with senior professionals from both groups ofrncontractors.rnThe results of the analyses have confirmed that all respondents agreed that their performancernwas influenced by all the factors indicated in the questionnaire and also identified the top tenrnfactors which significantly affect performance.rnRecommendations towards improvement of the current performance for local contractorsrnwere forwarded: they need to ensure that they have enough capital base and proper cash flow,rnadequate experience for a required assignment, proper planning and scheduling of the worksrnand ensure effective site management and supervision of the works and also to better controlrncost, local contractors shall make use of earned value concept to calculate cost and schedulernvariances as well as performance indices and forecasts of project cost and schedule duration.rnOn the other hand, International contractors were recommended to have project knowledge ofrnEthiopia, its social norms, expectations and local preferences, cultural issues, approvalrnprocesses, operating law; material and labor quality, differences encountered in workrnpractices, cultural differences, design and construction standards and permit processes.rnUnderstanding these differences and fine distinction in different countries help them reducernthe risks involved, thereby increasing the success of global projects.