Double Diamond
There is now a body of literature which is critical of Porter’s model.2O’Donnell(1997) suggests that two types of critique could be of particular relevance forthe study of small open peripheral economies, namely, those critiques concerningthe role of multinational enterprises (MNEs), and those which propose thatPorter’s diamond model be reformulated as a “double diamond” or “multiplediamond” model.As regards MNEs, Porter has been criticised for largely excluding foreign-owned MNEs as contributors to the competitive advantage of advanced hosteconomies (unless they “become part of the host country diamond”). Accordingto Porter, many MNE subsidiaries lack key managerial and R&D functions and,as a result, the information flow and technical interchange between such foreign-owned subsidiaries and their local business partners will be limited. Further-more, the free and open flow of information might be impeded due to culturaldifferences between foreign firms and local business partners (Porter, 1990,pp. 89, 103, 106, 679). Although Porter (1990, p.679), in a passage referring todeveloping countries, acknowledges that foreign MNEs can occasionally serveto “seed” a cluster, the main thrust of his theory puts the major emphasis on2.Clancy et al. (1998) include an outline of critiques of Porter, while Pentinnen (1994) providesa more detailed survey of such critiques.
