International competition in mature, localized industries: Evidence from the U.S. furniture industry

This study explores the changes taking place in a mature localized industry, traditionally dominated by national players, when it faces the growing presence of international competition. The study is grounded in the resource-based view of the firm and integrated with prior work on international mobility barriers. Drawing on this work, several hypotheses are developed: (1) that resources associated with above average performance will change following the advent of foreign competition; (2) that domestic firms will inadequately transition to the newer valuable resources under a regime of increased foreign competition; and (3) following the entrance of foreign competitors, domestic firms' strategies will display higher levels of convergence. Empirical results, tested on a sample of firms from the U.S. furniture industry, are generally supportive of the hypotheses, although with some exceptions.