JIBS Working Papers,
Jönköping International Business School

Abstract: This paper employs Porter’s diamond model to examine the relationships between a firm’s locational environment, its innovation capabilities, and competitive advantage assessed in terms of various performance indicators. This study implements a structural equation model that is estimated with the partial least squares (PLS) approach using a sample of 2,345 East German firms. This investigation shows that a high frequency of cooperation spurs firm innovativeness and performance, but that a strong focus on local demand impedes both. Various types of governmental support as well as the quality of locational factors tend to be more important for less innovative companies compared to the more innovative ones. The results indicate that strong local competition is an impediment to firm innovativeness and performance with conflicts which Porter’s prediction.

Keywords: Competitive advantage; firm environment; innovativeness; partial least squares

37 pages, July 30, 2010

Download statistics

• Jönköping International Business School
• Home page for this series

Questions (including download problems) about the papers in this series should be directed to Susanne Hansson ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:hhb:hjacfi:2010_006This page generated on 2024-09-13 22:18:22.