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Those who stayed loyal: An empirical examination of New Zealand manufacturers surviving in a global market

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  • Kylie Rochford
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    Abstract

    Purpose – Despite the ability of small and medium enterprise (SME) to successfully outsource production to low-cost labour markets, some SMEs continue to produce in the domestic market. A sharp decline in the number of New Zealand manufacturers of consumer goods has been observed in the last five years. This raises questions regarding the viability of a domestic manufacturing strategy in a global marketplace. The purpose of this paper is to explore the performance of New Zealand manufacturers who continue to pursue a domestic manufacturing strategy. Design/methodology/approach – The contextual background for the research is discussed first followed by the development of seven hypotheses. An overview of the methodology is presented before the results of statistical tests. A discussion of findings and implications precede concluding remarks. Practical implications – This reasearch suggests that SMEs need not succumb to pressures to shift manufacturing offshore in order to remain competitive in the local market. Findings – Findings suggest that company size, export strategy, and importance placed on non-financial goals influence the viability of a domestic manufacturing strategy. Originality/value – This paper is unique in that it does not argue domestic manufacturing as an optimal strategy, rather it considers the viability of a domestic manufacturing strategy in the consumer goods market. Furthermore, the paper adds insight on manufacturing strategy when faced with a small domestic market.

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    Bibliographic Info

    Article provided by Emerald Group Publishing in its journal Journal of Enterprising Communities: People and Places in the Global Economy.

    Volume (Year): 4 (2010)
    Issue (Month): 4 (November)
    Pages: 346-371

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    Handle: RePEc:eme:jecpps:v:4:y:2010:i:4:p:346-371

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    Web page: http://www.emeraldinsight.com

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    Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
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    Web: http://www.emeraldinsight.com/jec.htm

    Related research

    Keywords: Consumer goods; Manufacturing systems; New Zealand; Outsourcing; Small to medium-sized enterprises;

    References

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    1. Robert A Peterson & Alain J P Jolibert, 1995. "A Meta-Analysis of Country-of-Origin Effects," Journal of International Business Studies, Palgrave Macmillan, vol. 26(4), pages 883-900, December.
    2. Diana Farrell, 2005. "Offshoring: Value Creation through Economic Change," Journal of Management Studies, Wiley Blackwell, vol. 42(3), pages 675-683, 05.
    3. Agustí Segarra & Maria Callejón, 2002. "New Firms' Survival and Market Turbulence: New Evidence from Spain," Review of Industrial Organization, Springer, vol. 20(1), pages 1-14, February.
    4. Lance Eliot Brouthers & Keith D Brouthers & Steve Werner, 1999. "Is Dunning's Eclectic Framework Descriptive Or Normative?," Journal of International Business Studies, Palgrave Macmillan, vol. 30(4), pages 831-844, December.
    5. Michael Porter, 1994. "The Role of Location in Competition," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 1(1), pages 35-40.
    6. Audretsch, David B & Mahmood, Talat, 1995. "New Firm Survival: New Results Using a Hazard Function," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 97-103, February.
    7. Mata, Jose & Portugal, Pedro, 1994. "Life Duration of New Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 227-45, September.
    8. David L. Levy, 2005. "Offshoring in the New Global Political Economy," Journal of Management Studies, Wiley Blackwell, vol. 42(3), pages 685-693, 05.
    9. John H Dunning, 1988. "The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions," Journal of International Business Studies, Palgrave Macmillan, vol. 19(1), pages 1-31, March.
    10. Nitsch, Volker, 1996. "Do Three Trade Blocs Minimize World Welfare?," Review of International Economics, Wiley Blackwell, vol. 4(3), pages 355-63, October.
    11. Geroski, P A, 1992. "Price Dynamics in UK Manufacturing: A Microeconomic View," Economica, London School of Economics and Political Science, vol. 59(236), pages 403-19, November.
    12. Leo Dana & Robert Hamilton & Brooke Pauwels, 2007. "Evaluating offshore and domestic production in the apparel industry: The small firm’s perspective," Journal of International Entrepreneurship, Springer, vol. 5(3), pages 47-63, December.
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