International Business - Chapter 9 - Growing and Internationalizing the Entrepreneurial Firm

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Worldwide, SMEs generate what percentage of employment?

60 to 90 percent

Worldwide, small- and medium-sized companies (SMEs) account for about what percentage of firms?

95 percent

International entrepreneurship

A combination of innovative, proactive, and risk-seeking behavior that crosses national borders and is intended to create wealth in organizations.

Letter of credit (L/C)

A financial contract that states that the importer's bank will pay a specific sum of money to the exporter upon delivery of the merchandise.

Export intermediary

A firm that performs an important middleman function by linking domestic sellers and foreign buyers that otherwise would not have been connected.

Entrepreneur

A founder and/or owner of new businesses or managers of existing firms who identifies and exploits new opportunities.

Stage model

A model of internationalization that portrays the slow step-by-step (stage-by-stage) process an SME must go through to internalize its business.

Microfinance

A practice to provide micro loans ($50-$300) used to start small businesses with the intention of ultimately lifting the entrepreneurs out of poverty.

Born global firm (international new venture)

A start-up company that attempts to do business abroad from inception.

Indirect export

A way to reach overseas customers by exporting through domestic-based export intermediaries.

Small and medium-sized enterprise (SME)

An entrepreneur who starts, grows, and sell several businesses throughout a career.

Serial entrepreneur

An entrepreneur who starts, grows, and sells several businesses throughout a career.

Venture capitalist (VC)

An investor who provides risk capital for early stage ventures.

Wealthy individual investors who become a source of entrepreneurial financing for a start-up business is called:

Angels

A start-up company that attempts to do business abroad from inception.

Born global firms (or international new ventures)

Products that are made by an entrepreneur in his or her home country and sold to customers in other countries are called:

Direct exports

The sale of products made by firms in their home country to customers in other countries.

Direct exports

A founder and/or owner of new businesses or managers of existing firms who identifies and exploits new opportunities.

Entrepreneurs

Founders and/or owners of new businesses or managers of existing firms who identify and exploit new opportunities are called:

Entrepreneurs

The identification and exploitation of previously unexplored opportunities.

Entrepreneurship

A firm that performs an important middleman function by linking domestic sellers and foreign buyers that otherwise would not have been connected.

Export intermediary

Licensing is typically used in service industries such as fast-food chains.

False

Only MNEs have the resources to do business globally.

False

SMEs typically operate only domestically, and only large MNEs typically do business in other countries.

False

Societies that are individualistic and have low uncertainty-avoidance tend to foster fewer entrepreneurs.

False

Worldwide, SMEs create about 60 percent of the total value added to products.

False

In the US, small- and medium-sized companies (SMEs) are defined as having:

Fewer than 500 employees

Franchising

Firm A's agreement to give Firm B the rights to use A's proprietary assets for a royalty fee paid to A by B. This is typically done in service industries.

Which is NOT one of the 4Fs of entrepreneurial financing?

Foreigners

Firm A's agreement to give Firm B the rights to use A's proprietary assets for a royalty fee paid to A by B. This is typically done in service industries.

Franchising

A way to reach overseas customers by exporting through domestic-based export intermediaries.

Indirect exports

A combination of innovative, proactive, and risk-seeking behavior that crosses national borders and is intended to create wealth in organizations.

International entrepreneurship

A financial contract that states the importer's bank will pay a specific sum of money to the exporter upon delivery of the merchandise.

Letter of credit (L/C)

Microfinancing is defined as:

Loaning small sums of money (US$50 to US$300) to entrepreneurs in an attempt to lift them out of the poverty level

A practice to provide micro-loans ($50-$300) used to start small businesses with the intention of ultimately lifting the entrepreneurs out of poverty.

Microfinance

When an investor loans small sums of money (e.g. US$50 to US$300) to entrepreneurs in an attempt to lift them out of the poverty level, this is called:

Microfinancing

An entrepreneur who starts, grows, and sells several businesses throughout a career.

Small and medium-sized enterprise (SME)

A firm with fewer than 500 employees in the United States and with fewer than 250 employees in the European Union.

Small and medium-sized enterprises (SMEs)

A model of internationalization that portrays the slow step-by-step (stage-by-stage) process an SME must go through to internationalize its business.

Stage models

Entrepreneurship

The identification and exploitation of previously unexplored opportunities.

Direct export

The sale of products made by firms in their home country to customers in other countries.

As a firm moves from direct exports, to licensing, to FDI, the resources required for operating the business typically increase.

True

Franchising is typically used in service industries such as fast-food chains.

True

Societies that are collectivistic and have high uncertainty-avoidance tend to have fewer entrepreneurs.

True

Worldwide, SMEs create about half of the total value added to products.

True

An investor who provides risk capital for early stage ventures.

Venture Capitalist (VC)


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