Globalization and Regional Change in the U.S. Furniture Industry

Abstract

Furniture manufacturing has experienced rapid globalization in recent years. This is mainly the result of global production networks established by large manufacturers and retailers seeking to reduce costs in a highly competitive environment. The industry's globalization has been facilitated by technological innovations and the global reduction of trade and investment barriers. In the U.S., furniture-producing regions are experiencing tumultuous change. Growing numbers of firms are outsourcing production to China, which is now responsible for about half of all U.S. furniture imports. Employment levels have plummeted. However, an analysis of spatial patterns of employment, output, and capital investment in U.S. furniture manufacturing shows that regional change is not uniform. Southern regions characterized by larger firms specializing in wooden case goods production have been especially vulnerable to job loss. Copyright (c) 2008 Blackwell Publishing.

Price dynamics in the import wooden bed market of the United States

“…When China started its economic reform in 1978, Taiwanese entrepreneurs crossed the strait to take advantage of much lower production costs (Drayse, 2008;Tung, 2009). This has been a critical factor behind the growing furniture industry in China, especially during its early stage of development.…”

“…A primary reason behind that has been the establishment of global production networks using Chinese subcontractors (Drayse, 2008). The explosive export growth of China in the wooden furniture market is attributable to its comparative advantages and constructive actions in several aspects.…”

Sourcing from China: A Literature Review of Motivations, Outcomes, Problems, and Solutions

“…Besides the monetary effect, a gain in market specific knowledge and local habits can be generated (Salmi, 2006;Drayse, 2008), future dynamics of the Chinese or Asian market can be identified (Dierks et al, 2013), and the knowledge intensity and exchange with the suppliers can be improved (Bunyaratavej et al, 2008;Zhang et al, 2013), entailing that, gaining knowledge and expertise are important aspects.…”

“…In particular, knowledge can be gathered in cooperation with the suppliers that enabled the company to focus on its core competencies (Zhang et al, 2013;Salmi, 2006;Bunyaratavej et al, 2008), and access to a new market could also be developed (Drayse, 2008;Dierks et al, 2013). Only a few authors state that profitability can be enhanced, even though it represents a major motivation when sourcing from China (Kang et al, 2012;Lin & Ma, 2012;Ni et al, 2009).…”

“…Apart from the monetary motivation, Gonzalez et al (2006), Towers and Song (2010), and Drayse (2008) emphasize motivators such as flexibility and capacity. Jia et al support this, since all studied companies identified costs as a motivation.…”