The sustainable competitive advantage and catching-up of nations: FDI, clusters and the liability (asset) of smallness

We explore the role of foreign direct investment and (its relationship to) clusters for the competitiveness (and catching-up) of small(er) developing countries. We suggest that while size per se need not matter, small(er) developing countries need to explicitly account for any liabilities of smallness when devising and implementing strategies for competitiveness and catching-up. We claim that international strategic management scholarship can add insights on this important issue, by complementing extant literature and contributions by international trade and economic development scholarship.