User-Producer Interaction, Learning and Comparative Advantage.

Michael Porter's book The Competitive Advantage of Nations (1990) has led to increasing attention to the favorable impact that 'advanced domestic users' may have on competitiveness. This paper presents a critical appraisal of the theoretical and empirical evidence on this relationship. An econometric test of the hypothesis--of a positive impact of advanced domestic users on competitiveness--on data for sixteen OECD countries between 1965 and 1987 is presented. In general, the results give strong support to the hypothesis under test. The relationship appears to be stronger in cases where the home market is exposed to international competition. (c) 1995 Academic Press, Inc. Copyright 1995 by Oxford University Press.