Exploring the Roles of Entrepreneurship and Internationalization in Global Business

Background

Cantillion (1755) considered entrepreneurship as self-employment of any sort involved in a process of bearing the risk to organize factors of production to deliver a product or service demanded by the market. Marshall (1890) defined entrepreneurship as an important factor of production together with land, capital and labor. Knight (1921) who underlined the risk-bearing dimension of entrepreneurship. Drucker (1985) developed the innovation dimension of the entrepreneurship which implies the exploitation of existing resources through its ability to produce something new. The term entrepreneurship appears to be hard to define in a precise and unambiguous manner (Sorenson & Stuart, 2008).

Internationalization theory was built concerning the intellectual foundations of transaction cost established by Coase (1960) and first applied to multinational enterprises (MNEs) by Buckley and Casson (1976) and Hennart (1982). These latter two works suggest that firm-specific advantages determine a firm’s domestic and international success, with the environment acting as a constraining or facilitating force. MNEs increasingly need top managers who understand global markets and diverse business practices and who are aware of opportunities to compete on an international level (Finkelstein, Hambrick, & Cannella, 2009; Luo, 2005). Regarding transaction cost arguments, more reports in the literature of internationalization have considered the role of firms’ capabilities (Madhok, 1998), the effects of foreign exchange rate and the volatility of the corporate choice of foreign entry mode (Baek & Kwok, 2002), the impact of uncertainty on the timing and dimensioning of investment (Fisch, 2008), and the impact of corporate and national cultures on decentralization decisions (Williams & van Triest, 2009).