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Domestic Markets And International Competitiveness: Generic And Product‐Specific Competencies In The Engineering Sector

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  • ASHISH ARORA
  • ALFONSO GAMBARDELLA

Abstract

This paper develops a theory of how the size of the domestic market shapes firm competencies. Our theory implies that large markets are beneficial even if factors such as economies of scale or learning effects are absent. We validate our model by an international comparison of the performance of firms that provide engineering services to the oil and petrochemical industry. We conclude that, relative to the United States, the competitiveness of European or Japanese industries is greater in activities whose underlying competencies are not product specific and can be utilized across a variety of products. The benefits of large markets are greatest for activities based on product‐specific competencies. © 1997 by John Wiley & Sons, Ltd.

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  • Ashish Arora & Alfonso Gambardella, 1997. "Domestic Markets And International Competitiveness: Generic And Product‐Specific Competencies In The Engineering Sector," Strategic Management Journal, Wiley Blackwell, vol. 18(S1), pages 53-74, July.
    • Handle: RePEc:bla:stratm:v:18:y:1997:i:s1:p:53-74
    DOI: 10.1002/(SICI)1097-0266(199707)18:1+3.0.CO;2-V
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    Cited by:

    1. Wei, Yingqi & Zheng, Nan & Liu, Xiaohui & Lu, Jiangyong, 2014. "Expanding to outward foreign direct investment or not? A multi-dimensional analysis of entry mode transformation of Chinese private exporting firms," International Business Review, Elsevier, vol. 23(2), pages 356-370.
    2. Camisón, César & Forés, Beatriz, 2015. "Is tourism firm competitiveness driven by different internal or external specific factors?: New empirical evidence from Spain," Tourism Management, Elsevier, vol. 48(C), pages 477-499.
    3. Catherine Matraves & Laura Rondi, 2007. "Product Differentiation, Industry Concentration and Market Share Turbulence," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 14(1), pages 37-57.
    4. Muhammed Altuntas & Gerrit Gößmann, 2016. "The Relationship Between Home Market Performance and Internationalization Decisions: Evidence From German Insurance Groups," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 19(1), pages 37-71, March.
    5. Jusuf ZEKIRI, 2016. "The Motivating Factors For Entering Into Foreign Markets-The Case Of Republic Of Macedonia," EcoForum, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration - Economy, Business Administration and Tourism Department., vol. 5(1), pages 1-20, January.
    6. César Camisón, 2004. "Shared, Competitive, and Comparative Advantages: A Competence-Based View of Industrial-District Competitiveness," Environment and Planning A, , vol. 36(12), pages 2227-2256, December.
    7. Chen, Yi-Min, 2010. "The continuing debate on firm performance: A multilevel approach to the IT sectors of Taiwan and South Korea," Journal of Business Research, Elsevier, vol. 63(5), pages 471-478, May.
    8. Jiatao Li & Deborah R. Yue, 2008. "Market Size, Legal Institutions, and International Diversification Strategies: Implications for the Performance of Multinational Firms," Management International Review, Springer, vol. 48(6), pages 667-688, December.
    9. Sudhir Rana & Partha P. Saikia & Munim K. Barai, 2018. "Globalization and Indian Manufacturing Enterprises," FIIB Business Review, , vol. 7(3), pages 167-175, September.
    10. Suma Athreye, 1997. "On Markets in Knowledge," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 1(2), pages 231-253, June.
    11. Simms, Christopher & Frishammar, Johan & Ford, Nicholas, 2021. "The front end in radical process innovation projects: Sources of knowledge problems and coping mechanisms," Technovation, Elsevier, vol. 105(C).
    12. Allred, Brent B. & Swan, K. Scott, 2005. "The mediating role of innovation on the influence of industry structure and national context on firm performance," Journal of International Management, Elsevier, vol. 11(2), pages 229-252, June.
    13. Mangirdas Morkunas & Gintaras Cernius & Gintare Giriuniene, 2019. "Assessing Business Risks of Natural Gas Trading Companies: Evidence from GET Baltic," Energies, MDPI, vol. 12(14), pages 1-14, July.
    14. Liu, Xiaohui & Lu, Jiangyong & Chizema, Amon, 2014. "Top executive compensation, regional institutions and Chinese OFDI," Journal of World Business, Elsevier, vol. 49(1), pages 143-155.

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