Trade Adjustment Strategies Among U.S. Machine Tool Firms
Alan MacPherson Principal Investigator
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This project explores the extent to which US industrial firms in the machine tool (MT) sector have been adjusting to global competition via business strategies that emphasize export-expansion and/or import-containment. Particular attention is given to the role of product design and product policy in the commercial performance of MT firms (both exporters and non-exporters). A national survey of US-owned MT manufacturers will be conducted with a view to constructing taxonomic models that can accurately discriminate between successful versus less successful firms in this industry. A key hypothesis to be tested is that superior export performance and/or import-containment can be traced to product design strategies that emphasize close customer involvement at the early stages of new product development. A related hypothesis is that regional variations in the business performance of MT firms are likely to be present, reflecting geographic differences in local techno-market conditions. Specifically, firms located outside major clusters of MT production are expected to exhibit weaker business performance than their counterparts located in core regions that contain large numbers of firms in similar or related industries. Data for the study will come from a postal survey of the entire national population of MT producers, as well as from follow-up interviews with a representative subsample of firms. Logistic regression and/or discriminant analysis will be used to predict successful versus less successful trade adjustment among respondents.<br/><br/>The overall goal of the project is to identify those business strategies that best contribute to the commercial viability of US firms in an import-competing sector (machine tools). This is an important topic at this point in time, if only because the US machine tool industry is widely viewed as being of strategic importance to other US industries (notably the automotive and aerospace sectors). The project will highlight the effectiveness of different types of business strategies in terms of export success and/or adjustment to import competition. The results of the project will be made available to all project participants (i.e. firms), as well as to public policy agencies and the US Federal government. Ultimately, the project is designed to supply strategic blueprints to US machine tool firms that want to compete successfully in the international marketplace.