Locational and Internal Sources of Firm Competitive Advantage : Applying Porter’s Diamond Model at the Firm Level

• This paper employs Porter’s diamond model to examine the relationships between afirm’s locational environment, its innovation capabilities, and competitive advantage assessed interms of various performance indicators. The study implements a structural equation modelestimated with the partial least squares (PLS) approach and reveals that frequent cooperation spurs innovation and performance but that, in contrast to Porter’s prediction, a strong focus on local demand impedes both. Interestingly, various types of governmental support, as well as the qualityof locational factors, are more important for less innovative companies than they are for moreinnovative ones. We also find that strong local competition is an impediment to firm innovativeness and performance, which is in conflict with Porter’s model.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Nyckelord

competitive advantage

Porter’s diamond model

firm environment

cooperation

innovativeness

partial least squares

Economics

Nationalekonomi

Economics

Nationalekonomi

Publikations- och innehållstyp

ref (ämneskategori)

art (ämneskategori)