A review of competitive advantage theory applied to the global rare earth industry transition

Al Thibeault, Michael Ryder, Olusegun Tomomewo and Michael Mann

Resources Policy, 2023, vol. 85, issue PA

Abstract: The strategically vital rare earth industry is in a period of transition. The twelve trade-aligned Minerals Security Partnership nations leading this transition are currently addressing two major challenges – single-nation dominance of the production stream and increasing production capacity. Working with their national industries, their bold, post-transition vision of diversified, multi-national production with increased production capacity is being supported by massive government subsidies and new industry strategies. Meeting these two challenges are necessary short-term actions; however, a third challenge that is not being addressed puts the long-term success of the transition at risk. Competitive advantage theory suggests that re-building national competitive advantage determinants as the basis for firm profitability is a necessary condition for long-term transition success. Without a successful transition, critical societal goals such as clean energy transition which are dependent on a stable rare earth industry, are at risk. Long-term benefits from a larger, stable industry accrue to all rare earth industry nations through positive-sum productivity growth. This paper examines relevant research for using competitive advantage theory as an analysis framework for the rare earth industry transition. We noted a literature gap in applying competitive advantage theory to the rare earth industry, providing an opportunity to extend the literature in this important area. Searches of three databases, as well as our repository of articles from previous ad hoc library searches, yielded 51 articles for critical analysis. We found support for using competitive advantage theory as a transition analysis framework, noting theory extensions from two sources that will be required to address gaps in the theory when applied to the rare earth industry transition. The critical analysis revealed the underlying dynamic feedback structure of competitive advantage theory, supporting the use of dynamic simulation modeling for the study of the transition dynamics.

Keywords: Rare earth; Competitive advantage; Diamond model; Dynamic simulation (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301420723005068
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:85:y:2023:i:pa:s0301420723005068

DOI: 10.1016/j.resourpol.2023.103795

Access Statistics for this article

Resources Policy is currently edited by R. G. Eggert

More articles in Resources Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().