Is it always bad if you continue to publish with your PhD advisor? What about the small country vs. big country bias?
Do good work and publish in high impact journals. As long as you're doing good work, then it really shouldn't matter who you are publishing with. I don't think I've ever read a paper from a small country and had a preconceived notion about the quality of the work. However, if your lab becomes well known for a research area then I think that's a benefit and not a hindrance.