Impact of community-based business model and competitive advantage on exports: evidence from diamond industry

Abstract

Purpose: This study aims to examine the altering paradigms for two specific characteristics of the international diamond industry: community-based business model and competitive advantage and their impact and interaction effect. Design/methodology/approach: This study uses global value chain (GVC) analysis to understand the industry characteristics, social impacts and disruption in the international diamond industry. Further, normalized revealed comparative advantage is used to measure the competitiveness of different countries over time. Finally, stochastic frontier analysis is used to test the impact of the community-based business model and competitiveness on exports and estimate the technical efficiency. Findings: The international diamond industry is witnessing changes in the business model, competitiveness, processes, policies and consumer behavior. While competitive advantage and community have a positive impact on exports, the relationship between competitive advantage and exports gets negatively moderated by the community. Further, insights from the GVC analysis indicate that though the industry is facing several disruptions and challenges, it has shown the unique quality of community reconfiguration and relocation. Originality/value: This paper provides insights into the diamond industry facing multiple disruptions at various stages of GVC and contributes to the literature on international trade, community-based business models and GVC.