This study seeks to develop a dynamic theoretical framework for global competitiveness and to determine whether the enhancement of firm performance comes as a consequence of clustering at the location level, inter-organisational trust at the relationship level, or resource and knowledge management at the firm level. Examining a sample group of petroleum industry investing in the Iran, we find that resources and the mechanisms of system dependence have a positive impact on performance. Further, we find that embedding and knowledge transfer are key determinants of industry clusters that lead to global competitiveness and resources interact with clustering to positively impact firm performance. The implications of the framework for organisations in the petroleum industry are creating trust and encouraging inter-organisation relationships. These organisations also need to design processes for tacit knowledge transfer, implement mentoring programmes and build general management capabilities.
