Industry-specific competitiveness of a nation and its consequence on overseas marketing performance: Measurement construction and empirical study that follows porter's diamond model

Abstract

This study attempts to construct a scale in order to measure competitiveness of a nation by industry, rather than by a whole nation which is used in IMD's “World Competitiveness Report”. After reviewing related literature, three shortcomings in IMDís case are found to be improved, the new scale thus should be designed for solving these three shortcomings. Scale construction followed Porter's (1990) “Diamond” model in his publication “Competitive Advantage of Nations” and Rugman et. al., ís (1993) modified “Double Diamond” model. A five-construct, forty-item scale is constructed, named “Dual Diamond.” The five constructs are (1) Factor conditions, (2) Demand conditions, (3) Related and support industries, (4) Firms' strategy, structure and rivalry, and (5) General environment including government, political, economic and cultural conditions. Both theindustry-specific competitiveness in home country and host country are involved in the Dual Diamond model, rather than just a single country in Porter's original model.

In order to test the validity of this new model and scale, 86 foreign-owned firms in European countries are sampled by questionnaires for the empirical study. Two benchmarks of overseas marketing performance, sales growth rate and market-share growth rate in host countries, are used as dependent variables for testing. Results of multiple regression analysis indicates that the new model is valid on explaining the marketing performance in the host countries. Besides, the results reveal that the “diamond” in host country has higher explanation than in home country, with a support on Porter's (1990) “home base” concept.

Keywords:

• Industry-Specific Competitiveness of Nations
• Porterës (1990) Diamond
• The World Competitiveness Report
• Overseas Marketing Performance
• European Study