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The beta of a project is the correlation between the returns from the project and the returns from a benchmark stock index.
If a project has extensive operations world wide and a large percentage of its customer base is abroad the revenue inflow is affected to a large extent by changes in the economies of other countries than by changes in the domestic economy.
For example, a project based in China that manufactures goods consumed primarily by customers in the US would have a higher beta when it is calculated against the US stock exchange than when it is calculated against the domestic Chinese stock exchange. A similar case would apply to a project in the US that has most of its customers based in the Europe. The beta in this case would be very high when calculated against European stock exchanges than when calculated against the domestic US stock exchange. The returns from the project would be correlated more with the economic situation in Europe. If the European stock exchanges were to drop the returns from the project would fall substantially even if the domestic stock exchanges rise.
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