National competitive advantage theory argues that companies that can benefit from the product or process technologies of an internationally competitive industry begin to form clusters of related economic activities in the same geographic region.

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National competitive advantage theory, also known as Porter's diamond model, asserts that companies that gain from the product or process technologies of a globally competitive industry start to create clusters of correlated economic activities in the same region, which benefits them in terms of economies of scale, knowledge sharing, and innovation.

National Competitive Advantage Theory Argues That Companies That Can Benefit