Influence of Porter’s Diamond Cluster on Pakistan Automotive Industry’s Performance

Abstract

The purpose of this study was to conduct a theory based contextualization of Porter’s diamond related and supporting industries determinant and investigate the influence of clusters, fostering knowledge and innovation, on the performance of automotive firms in Pakistan. In this empirical study the research methodology entails applying axiology of positivism philosophy, self-administered structured questionnaire after pilot study. The research design was cross-sectional, probability technique was constructed in data collection; data analysis was performed by descriptive and inferential statistics. Hypothesis was tested through regression model. Size of sample was 194. The study findings noted absence of empirical research on Porter’s diamond in Pakistan in the automotive industry. Related and supporting industries of Porter’s diamond attribute have theoretical and conceptual perspective to provide impetus for firms in automotive industry to realize competitive advantage (CA). The study findings conclusively confirmed the determining force of clusters of related and supporting industries and its significant impact on the performance of the auto sector in Pakistan. The study investigated the automotive industry across multinational corporations (MNCs), private companies and joint ventures (JV). Practical implications are significant for constituencies like practicing managers, academia, and government policy makers. The research study is important owing to its conceptual and practical perspective for industry players and policy makers to help this key large scale manufacturing industry to realize CA by internalizing the related and supporting industries determinant of Porter’s diamond.

Keywords: automotive industry, clusters, competitive advantage, national competitive advantage, related and supporting industries.

DOI: 10.7176/EJBM/11-19-05

Publication date:July 31st 2019