International Entrepreneurship - 3 - How Global?

Dr Joseph K.K. Ho
How Global?
International
Entrepreneurship

2
©2019DrJosephK.K.Ho
 The Role of Entrepreneur
as an Export
 How do entrepreneurs
promote export ?
 Types of International
Entrepreneurship

The Role of Entrepreneur as an Export
• Entrepreneurs play an important
role in economic development by
exporting goods and services in
large scale
3
Reference:
Farayibi, A. (2015). Entrepreneurship as a Driver of Economic Growth: Evidence from Enterprise Development in
Nigeria. SSRN Electronic Journal.
https://mpra.ub.uni-muenchen.de/74591/1/MPRA_paper_74591.pdf

• Significant relationship between export-oriented
entrepreneurship and economic growth in
developed countries
• Export orientation makes a significant additional
contribution to economic growth (Hessels & van
Stel, 2009)
4
Reference:
Hessels, J., & van Stel, A. (2009). Entrepreneurship, export orientation, and economic growth. Small Business Economics (Online first version), 1-14.
https://link.springer.com/article/10.1007/s11187-009-9233-3

• Earning huge amount of foreign currency
exchange from export to combat import dues
requirement
• Import substitution and export promotion
ensure economic independence and
development
5
Reference:
Hitman, C. (1967). Exports and Economic Growth: A Survey. Land Economics, 43(2), p.148.
https://www.jstor.org/stable/3145238?seq=1#page_scan_tab_contents

How do entrepreneurs promote export ?
Seek for export promotion feasibility
 Accumulate information about
international markets; consider
the feasibility of exporting.
6
References:
Czinkota, M. (2019). THE RATIONALE FOR EXPORT PROMOTION.
https://www.researchgate.net/publication/268031019_THE_RATI
ONALE_FOR_EXPORT_PROMOTION
Dhaliwal, A. (2016). Role Of Entrepreneurship In Economic Development. International
Journal of scientific research and management (IJSRM), 4(6), pp.4262-4269
https://www.ijsrm.in/index.php/ijsrm/article/download/354/305/

Seek for export promotion feasibility
 Consider new factors in exporting:
currency exchange rates, geographical
distances, new transportation, new
government regulations, new legal and
financial systems, etc.
7
References:

Work out export methods
 Export directly
 Utilize agencies
8
References:

Types of International Entrepreneurship
 Import and Export
 Licensing
 Franchising
 Outsourcing and
Offshoring
9
Reference: Hisrich, R. (2010). International entrepreneurship. SAGE, p.9.
The process of an entrepreneur conducting business activities across national boundaries
 JVs and Strategic
Partnership
 Multinational Companies
 Foreign Direct
Investment (FDI)

10Reference: Efinancemanagement.com - International Financial Management
https://efinancemanagement.com/international-financial-management
Import and
Export
• Inflow and selling of goods
from and to home country
from outside
Licensing • A standardized product with
ownership rights can be
distributed using licensing

Franchising • Parent company gives right
to other companies to carry
on business in its name
Outsourcing
and Offshoring
• Giving out the contracts to
international firms for
certain business purpose

JVs and
Strategic
Partnership
• Agreement between two
companies (one being an
international company) to
where the business bas to
be conducted
Multinational
Companies
• Conducting business in more
than one country

Foreign Direct
Investment
(FDI)
• Investment made by an
individual or a company
located in one country to the
business interest located in
another foreign country

Import and Export
© 2019 Dr Joseph K.K. Ho
Advantages Disadvantages
• Importer: Cost reduction,
quality production, etc.
• Exporter: Potentiality, high
profits through bulk sale
• Importer: Huge dent in
domestic market, high
taxes, etc.
• Exporter: Language
Barrier, competitive, high
compliance

Licensing
• quick, easy entry into
foreign markets
• allowing a company to
“jump” border and tariff
barriers
• a low level of control
• risk of losing intellectual
property

Franchising
• reduction in risk of market
structure
• established brand value,
existing awareness, etc.
• fixed time period
• strict terms & conditions
• less innovative,
prescriptive, etc.

Outsourcing and Offshoring
17Reference: Mybusiness.com.au - Offshoring and outsourcing - advantages and disadvantages.
https://www.mybusiness.com.au/sales/3366-offshoring-and-outsourcing-advantages-and-disadvantages
• focus on strategizing
business growth
• risk of a data breach or a
cyber attack

JVs and Strategic Partnership
18
Reference: Efinancemanagement.com - International Financial Management
• Simplicity
• less statutory compliance
• reputation increase
• quality production, etc.
• Difficulty in finding the
other party
• Diversion towards JV
purpose may cause
permanent damage to the
business

Multinational Companies
19Reference: Futureofworking.com - 7 Advantages and Disadvantages of Multinational Corporations
https://futureofworking.com/7-advantages-and-disadvantages-of-multinational-corporations/
• Cheaper Labour
• Broader Market Base
• Tax Cuts
• Job Creation
• Potential Abuse of Workers
• Threat to Local Businesses
• Loss of Jobs

Foreign Direct Investment (FDI)
20Reference: Thebalance.com - Foreign Direct Investment, Its Pros, Cons, and Importance to You
https://www.thebalance.com/foreign-direct-investment-fdi-pros-cons-and-importance-3306283
• Diversifies Investors
Portfolios
• Promotes Stable Long
Term Lending
• Provides financing and
technology to Developing
Countries
• Not suitable for
strategically important
industries
• Investors may have less
moral attachment
• Unethical access to local
markets

21
Carmen Stevens: Top Entrepreneur: Export
Markets
https://www.youtube.com/watch?v=Vp-V8lo-
v4E
International Trade and Economic Development
Unit: Export Promotion
https://www.youtube.com/watch?v=W1ol3b-eoNs

22
How to better integrate SMEs in global trade?
https://www.youtube.com/watch?v=azfmTI1
al60
International trade: Absolute and comparative
advantage
https://www.youtube.com/watch?v=Vvfzaq72w
d0

23
INTERNATIONAL ENTREPRENEURSHIP -
John Kraft
https://www.youtube.com/watch?v=feX59Uc
gyP4
What are the modes of Entry in International
Business?
https://www.youtube.com/watch?v=Flw-
l6AMdt8&t=107s

What’s more in
International
Entrepreneurship?
• Think Global?
24

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