Paper
Competitiveness of US Household and Office Furniture Industry
- Authors:
- Rado Gazo; Mingyao Song
- Abstract
- Throughout the last decade, both the global and the U.S. furniture industry experienced continuous growth until they were heavily impacted by the global financial crisis and started the downward trend in 2008. This article examines the international competitiveness of the U.S. furniture industry by the trade theories of both inter-industry and intra-industry. According to indicators of trade performance, Balassa’s revealed comparative advantage index and Vollrath’s revealed competitive advantage indexes, U.S. does not have a comparative advantage among the furniture producing countries. The primary reason is competition from producers of developing countries, which has caused the U.S. furniture firms to either decrease production or close facilities (Pirc 2010). The standard Grubel-Lloyd index is used to examine the extent of intra-industry trade of major furniture trading countries in the world. This index is also applied to U.S. furniture’s bilateral intra-industry trade. The results show that the global furniture industry is more likely to be characterized by inter-industry trade rather than intra-industry trade. U.S. does not have a high level of intra-industry trade because the values of U.S. furniture imports are much bigger than exports. The extent of bilateral intra-industry trade in furniture between U.S. and its major trading countries is small except with Canada and Japan. The U.S. is now facing unfavorable economic circumstances such as shrinking international demand and rising labor cost.
- Keywords
- Competitiveness; Manufacturer; Inter-Industry Trade; Intra-Industry Trade
- StartPage
- 47
- EndPage
- 55
- Doi