The comparative advantages in the wooden furniture industry: does the export price matter?

Abstract

PurposeThe purpose of this paper is to evaluate the global competitiveness of the top ten wooden furniture exporting countries with several approaches and to test the effect of export prices (EXPRs) on the global competition.Design/methodology/approachCountries' competitiveness levels were measured with revealed comparative advantage (RCA), normalised RCA (NRCA), revealed symmetric comparative advantage (RSCA) and trade balance index. Furthermore, panel regression analysis techniques were used to test the effects of EXPR on RCA, NRCA and RSCA in the wooden furniture industry (WFI).FindingsAlthough the comparative advantage approaches give different results, the global competitiveness of Poland and Vietnam is at a high level in all approaches. Canada has been the country with the weakest global competitiveness in all approaches. According to the results of the analysis, EXPRs positively affect all the competitive advantage indexes. As a result, the competitiveness of the WFI is affected by the non-price factors instead of the EXPR.Research limitations/implicationsThe framework allows us to measure and illustrate the export competitiveness of the WFI and permits a global comparison. Similar analyses can be made for different labour-intensive sectors. In addition, analysis can be made to identify non-price factors for the WFI sector. Thus, more specific inferences can be made.Practical implicationsThis study is useful for policymakers, government officials, the industry associations and the company executives to assess their export competitiveness in the WFI. Thus, they can determine whether to shift scarce resources to this industry or other industries. In addition, this study may affect the price competition policy of the sector representatives in the global market.Originality/valueThis study deals with the competitiveness of the WFI with different approaches. And this study determines the importance of price for global competition in this sector.