The Sustainable Competitive Advantage and Catching-up of Nations: FDI, Clusters and the Liability (Asset) of Smallness

Abstract

and Key Results: 0 We explore the role of foreign direct investment and (its relationship to) clusters for the competitiveness (and catching-up) of small(er) developing countries. 0 We suggest that while size per se need not matter, small(er) developing countries need to explicitly account for any liabilities of smallness when devising and implementing strategies for competitiveness and catching-up. 0 We claim that international strategic management scholarship can add insights on this important issue, by complementing extant literature and contributions by international trade and economic development scholarship.

The Political Economy of European Anti-trust and Industrial Policy

“…This, in turn, has led to more emphasis being placed on the knowledge and innovation-promoting potential of different institutional configurations. The 'national', regional and sectoral systems of innovation approach, the literature on clusters of firms, the work of Michael Porter (1990) on national competitiveness, and the "varieties of capitalism" perspective, all draw upon and relate to this evolutionary/resource/system-based view (Pitelis, 2009a). 4 There are various other implications of the evolutionary/resource and systemsbased perspective for industrial and competition (anti-trust) policies.…”

“…Overall, this approach to competition could be described as domestically focused managed competition balanced with cooperation (co-opetition). The approach of the East Asian 'tigers' was similar, although some of them, especially Singapore, affected 'technology transfer' not through licensing as practised by Japan, but through an inward investment policy (Pitelis, 2009a).…”

“…Developments in economics and management in recent years such as the new international trade theory, the new endogenous growth theory, the new location economics, the resource and dynamic capabilities-based perspective, and the national, regional and/or sectoral systems of innovation approach Pitelis, 2009a), arguably offer some support to the Japanese perspective and policies (Jovanovic, 2009). In part due to these developments, recent approaches to competition and industrial policies in the Western world have tended to move away from the standard neoclassical perspective, and towards an approach and policies aimed at improving competitiveness at the firm and macro levels.…”

“…This is evidenced by the fact that the very term 'industrial policy' has returned, following years of 'disrepute' and a focus on 'horizontal measures'. 'Horizontal measures' related to education, innovation and entrepreneurship are critical for economy-wide value creation (Pitelis, 2009a Indeed, recent EU policy reads very much like the evolutionary, resource, systembased approach (Pitelis, 1998;. We focus on four recent EU documents or statements here (EC, 2002(EC, , 2004(EC, , 2005(EC, , 2007.…”

“…The importance of industry, 'deindustrialisation', 'competitiveness', the 'sectoral dimension', synergies of policies, systemic view, regulation, environmental and energy sustainability and the challenges of (semi)-globalisation (and now de-globalisation), in the knowledge-based economy, are all well known and accepted themes within the resource/systems-based perspective. Indicatively, these are discussed, among many others, in Pitelis (1994Pitelis ( , 1998Pitelis ( , 2001Pitelis ( , 2007Pitelis ( , 2009a, Antonakis (2003), Edquist (2005) and Lundvall (2007). In this context, EU policies in the new millennium are more in line than ever before with the evolutionary/resource/system-based view and they represent continuous and incremental progress in the right direction.…”