Spatial adjustments of furniture industry. A comparison of spain and denmark(2006-2015)

Resumo

Abstract The main objective of the thesis is to analyse the most important factors of location strategies of the furniture industries in Spain and Denmark. The analysis combines both qualitative and quantitative research. Qualitative research includes the macro location strategies analysis of the industry and micro location strategies analysis of the companies in the clusters. Quantitative analysis (Grubel and Lloyd-GL index and multiple linear regression analysis) is to ascertain the important geographic economics factors affecting the Intra-Industry Trade. The analysis of the macro situation of the furniture industries of the two countries shows that Denmark has advantages in production and design. To compete with Denmark, Spain is trying to remedy their production decline by providing direct financial aid to these companies and encouraging furniture exports to emerging countries. Furthermore, Spain is putting more effort into its design-phase R&D. The analysis of the micro situation of the furniture companies in the clusters in the two countries shows that Denmark has advantages in transportation due to high consolidation levels. In this way, they reduce more costs than Spain. However, the companies in the two countries do not have comparative advantages in production and design due to the companies’ differing situations. The result also exhibits that production, design and promotion are important for the companies in clusters in the two countries. Transportation is less important than these three factors. However, from the macro point of view of the cluster, transportation is important since producers’ efficient consolidation of transport can lower the cost of the whole cluster. In the analysis of the Intra-Industry Trade, there are two important findings. One is that the Intra-Industry Trade in Spain is more diversified than in Denmark for the following two reasons. First, all the five major trade partners of Denmark are European countries. However, in the five major trade partners of Spain, only three of them are European countries, whilst two are non-European countries. Spain has much two way trade with these two countries because they can use the transportation advantage of the Mediterranean Sea. Second, the result of the regression analysis demonstrates that Spain undertakes frequent two way trade with high GDP countries. This phenomenon is not found in Denmark. Another finding is that the two countries compete for the European market due to geographical distances; additionally, common borders are important to both, and the main import and export markets for both countries are Europe. The dissertation has both contribution in the method and content. The method used in this thesis has some differences compare to the literature of the geographic economics. For example, in the quantitative research of the Intra-Industry Trade, the generalized least square regression method was used, which is different from the regression method used in other research. From the point of view of the content, the dissertation has contributions in the following three parts. First, it identified that the strategies used in the clusters in the two countries are different. The strategies of Spanish companies focus on the quality. Denmark emphasises the cost advantage and quality at the same time. Second, this dissertation discovered the characteristics of the national cluster of Denmark. Third, this analysis also talked about factors that are not mentioned in other analyses such as location decisions and two new trends of outsourcing.