Talk:National Diamond

Criticism on Porter's National Diamond
Davies, H. & Ellis, P. Porter's competitive advantage of nations: Time for the final judgement? Journal of Management Studies, 2000, 37, 1188-1213

Abstract: Porter's (1990) Competitive Advantage of Nations (CAN) was heralded on publication as a book which could build a bridge between the theoretical literatures in strategic management and international economics, and provide the basis for improved national policies on 'competitiveness'. This review of CAN draws on papers written since its publication to show that while it was enormously rich in its range and scope it fell far short of the claims made for it. That failure arose from a number of sources. Most fundamentally, there were elisions with respect to the object of the analysis which meant that explanations for productivity at national level became confused with explanations for industry level success in gaining market share. Second, there were fundamental misunderstandings of the factors which determine trade, particularly with respect to the principle of comparative advantage. Third, there were flaws in the methodology and mode of reasoning. Finally, the assertions which form the heart of CAN have been refuted. Sustained prosperity may be achieved without a nation becoming 'innovation-driven', strong 'diamonds' are not in place in the home bases of many internationally successful industries and inward foreign direct investment does not indicate a lack of 'competitiveness' or low national productivity. Policy-makers are left with a 'laundry list' on which to base simple SWOT-type analyses of their economies, but there is no reliable guide to policy. Developing countries in particular are inadvertently encouraged to pursue policies which might be harmful. Porter generalized inappropriately from the American experience, while confusing competition at industry level with trade at national level. CAN's failure suggests that academicians of international business would be well advised to revisit the elementary economics of trade and growth before venturing too boldly into the field of policy.

Dr. Kosfeld's comment on this article
Dr. Kosfeld has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

"- National Diamond Origninally Porter focusses on "The Competitive Advantage of Nations" (1990). In follow-up works the regional perspective in the global economy became more and more the focus of attention. In particular in his paper "Location, Competition, and ..." in 2000 Porter explains his diamond model ("Porter's diamond model" not "national diamond") with a view on regional (local) clusters. - Introduction The start with "stratetic analysis" with an "industry-view" and "resouré-based view" sound somwhat strange. Strategy is only one element of the diamond model. Porter's diamond model is inextricablle linked to competition in the global economy and regional clusters. - Additional references Porter, M.E. (2000), Location, competition, and economic development: Local clusters in a global economy, Economic Development Quarterly 14, 15-34."

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 * Reference : Reinhold Kosfeld & Mirko Titze, 2014. "Benchmark Value Added Chains and Regional Clusters in German R&D Intensive Industries," MAGKS Papers on Economics 201437, Philipps-Universitat Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

ExpertIdeasBot (talk) 20:22, 24 September 2016 (UTC)