Globalization and Entrepreneurship

Globalization and Entrepreneurship

Policy and Strategy Perspectives

The McGill International Entrepreneurship series

Edited by Hamid Etemad and Richard Wright

The contributors to this collection provide a wealth of new analyses of both traditional and emerging aspects of entrepreneurship, from a variety of national perspectives and from a variety of disciplines. Globalization has begun to dismantle the barriers that traditionally segregated local business opportunities and local firms from their international counterparts. Local markets are becoming integral parts of broader, global markets. As globalization proceeds apace, entrepreneurs and small businesses will play a more prominent role on the global business arena. The volume is divided into three sections. The first looks at the internationalization process itself while the second focuses on factors facilitating this process in small and medium-sized firms. The last section examines emerging dimensions in management policy.

Chapter 2: On the Determinants of Exporting: UK Evidence

Panikkos Poutziouris, Khaled Soufani and Nicos Michaelas

Subjects: business and management, entrepreneurship, international business

Extract

Panikkos Poutziouris, Khaled Soufani and Nicos Michaelas INTRODUCTION The post-industrial development of the UK economy has been clearly associated with the sustainable performance of internationally competitive industries involving both small and large enterprises that operate in the production, distribution and services sectors. According to industrial statistics, export growth has been the main driving force behind the recovery in UK production output in the early 1990s, and, recognizing this, government often calls for a more strategic approach to fostering the export performance throughout the economy (HM Government, 1994). The characteristics of larger, exporting firms have been well documented in the literature. For such firms it is observed that exporting enhances business growth potential (i.e. through economies of scale and scope), accelerates technological and marketing innovations, diversifies business risk and improves company financial performance (Terpstra and Sarathy, 1994 and Bradley, 1995). However, even though it has been noted that an increase in the number of actively exporting small and medium-sized enterprises (SMEs) would make a larger contribution to job creation, stimulate economic growth, and improve the national balance of payments (Verhoeven, 1988; Samiee and Walters, 1990), little study has been done on which SMEs successfully internationalize and why. Increases in local competition between enterprises, irrespective of their scales of operation, result in additional pressures to seek new markets for their products, which can be found by internationalizing, that is, by launching their entrepreneurial activities beyond their local or national boundaries. An important mode of internationalization for SMEs – exporting – is considered by...

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