Resources, mobility barriers, and the international competitive position of an industry

Abstract

Abstract Studies on international competition have tended to focus on macro-level differences in factor endowments or firms' strategic motives. We propose a simple framework for analyzing the dynamics of international competition in a previously domestic industry. Using the resource-based theory of the firm, the domestic industry is treated as a distinct strategic group vis-a-vis foreign firms. The nature of inward international competition can then be characterized as a function of foreign firms' resources versus the resources used by domestic firms as international mobility barriers (IMBs). Domestic firms' response to international competition can also be viewed as a resource readjustment process.