CHAPTER 9

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PENG t SHARMA
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 CHAPTER 9 LEARNING
OBJECTIVES
After studying this chapter, you should be able to:

1. Define entrepreneurship, entrepreneurs, and

entrepreneurial firms.
2. Identify the institutions and resources that affect
entrepreneurship.
3. Identify three characteristics of a growing
entrepreneurial firm.
4. Describe how international strategies for entering
foreign markets are different from those for
staying in domestic markets.
5. Articulate what you should do to strengthen your
entrepreneurial ability on an international level.
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LO1: ENTREPRENEURSHIP
Terms to Know
 Entrepreneurship
 Entrepreneurs
 International
entrepreneurship

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LO2: INSTITUTIONS, RESOURCES,
AND ENTREPRENEURSHIP

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LO2: FORMAL INSTITUTIONS
AND ENTREPRENEURSHIP
Whether
entrepreneurship is
facilitated or retarded
significantly depends
on formal institutions
governing how
entrepreneurs start
up new firms.

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LO2: INFORMAL INSTITUTIONS
AND ENTREPRENEURSHIP

Individualistic, low uncertainty-

avoidance societies tend to foster
more entrepreneurs than collectivistic,
high uncertainty-avoidance societies.

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 LO2: RESOURCES AND
ENTREPRENEURSHIP

Entrepreneurial resources must be…

 Valuable
 Rare
Inimitable

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
 Organized
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LO3: CHARACTERISTICS OF A
GROWING ENTREPRENEURIAL FIRM

 Growth

 Innovation

 Financing

 Internationalization
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LO3: FINANCING THE
ENTREPRENEURIAL FIRM

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LO3: FINANCING THE
ENTREPRENEURIAL FIRM

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LO4: INTERNATIONALIZING THE
ENTREPRENEURIAL FIRM

MYTH: Only large MNEs do

business abroad; SMEs operate
domestically

Born global firms: start-ups that do

international business from inception

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LO4: ENTERING FOREIGN
MARKETS

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LO4: AN EXPORT-IMPORT
TRANSACTION

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LO4: STAGE MODEL
 Suggests that required level of complexity and
resources increase as firm moves from direct export
to licensing to FDI.

 But, there are many counter-examples (born

global firms).

 The key to rapid internationalization–the

international experience of the entrepreneurs.

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LO4: STAYING IN DOMESTIC
MARKETS

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LO5: ENCOURAGING
ENTREPRENEURISHIP ON AN
INTERNATIONAL LEVEL

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DEBATE: MICROFINANCE: MACRO
SUCCESS OR GLOBAL MESS?

 Muhammad Yunus pioneered

microfinance, a system for providing
small loans to poor people in places like
rural India (primarily to women or village
collectives), which can be used to make
small capital investments (cows, cell
phones) for entrepreneurial activities.
 Recent IPOs of microfinance institutions have sparked
controversy over the ethics of shareholders profiting from the
poor.
 During the 2008-2009 crisis, default rates skyrocketed, leaving
many borrowers burdened with crippling amounts of debt.

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