Explaining national competitive advantage for a small European country: A test of three competing models

Porter (1990) proposed that the competitive advantage of nations comes from a set of six factors, termed the Home-Diamond. However, there have been a number of criticisms of this model. It has been suggested that, at least for small countries, competitive advantage may be derived from a combination of "Diamonds" which can exist outside of the home country (Rugman, 1991). This study examines three variations of the Porter Diamond in an effort to determine the competitive advantage of a small European country (The Netherlands). The three models are the Home-Diamond recommended by Porter, the Double-Diamond recommended by Rugman, and the Multiple-Diamond recommended by Dunning and others. The findings tend to indicate that for small countries the Double-Diamond and Multiple-Diamond methods of calculating a country's competitive advantage are superior to Porter's Single-Diamond method.