Domestic demand, learning, and <i>The Competitive Advantage of Nations</i>: a review of the empirical evidence

Jan Fagerberg

in Competition, Competitive Advantage, and Clusters

Published in print February 2011 | ISBN: 9780199578030
Published online May 2011 | e-ISBN: 9780191724923 | DOI:
Domestic demand, learning, and The Competitive Advantage of Nations: a review of the empirical evidence

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This chapter focuses on one determinant of national advantage in the Diamond framework – demand conditions – and examines empirical evidence. Although the idea that the domestic market may affect competitiveness positively is by no means a new one, the publication of The Competitive Advantage of Nations led to increasing attention on the favorable impact the domestic market, through ‘advanced domestic users’, may have on the international competitiveness of a country. The chapter presents a critical appraisal of the theoretical and empirical evidence on the hypothesis that ‘advanced domestic users’ have a positive impact on the international competitiveness of a country. Examining evidence presented by three studies, it is found that the findings of these studies are consistent with the predictions made by Porter.

Keywords: Michael Porter; domestic demand; domestic users; learning; international competitiveness

Chapter.  7341 words. 

Subjects: Business Strategy

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