Impact of International Entrepreneurship on Economic Development

This report delves into the relationship between international entrepreneurship and economic development, highlighting the crucial role of entrepreneurs in driving economic growth. It defines both international entrepreneurship, as the expansion of businesses across borders, and economic development, as the overall growth of an economy. The report analyzes how international entrepreneurship contributes to increased employment, higher GDP, and improved foreign exchange rates. It examines the impact of innovation, new products, and services on the standard of living and social life. The report also explores various theories of international entrepreneurship, including internalization and innovation theories, and concludes that international entrepreneurship is directly linked to economic development through increased per capita income, job creation, and technological advancements.

Individual project 2
Entrepreneurship

ABSTRACT
In this report it has been described about the topic on connection between international
entrepreneurship and economic development. Also, discussed that how entrepreneurship
contributes in economic development of nation in terms of license, export, etc. besides that,
the definition of international entrepreneurship and economic development is explained.
Moreover, it had analysed that to how entrepreneurship contributes towards economic
development. In addition to it, theories and concepts of this entrepreneurship is explained.

Table of Contents
ABSTRACT.....................................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
International entrepreneurship and economic development...................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Entrepreneurship is basically the procedure of designing as well as running the new
business specifically small business. An entrepreneur is the one who runs their own business and
thus bears all the loss and profit. The international entrepreneurship is the approach where
entrepreneurs mainly take their business across the cross cultural boundaries and perform their
functions in the host country (Autio, 2017). International Entrepreneurship had a great impact
upon economic development and thus help in increasing economy. International
entrepreneurship plays a great role in defining economic development and thus help to in array
of ways in increasing the overall GDP of the country. The main aim of this report is to
understand the relation between entrepreneurship and economic development and study how
international entrepreneurship helps in economic development (Cussen and Cooney, 2019).
This report gives a brief overview of international entrepreneurship and economic
development, impact of international entrepreneurship on economic development, defining
international entrepreneurship and economic development and contribution of entrepreneurship
towards the economic development.
MAIN BODY
International entrepreneurship and economic development
Economic development and international entrepreneurship are interrelated. Both these
aspects contributes towards the economic development. International entrepreneurship is
predominately the approach which considers expansion of the firm across cross-cultural
boundaries. International entrepreneurship is when the entrepreneur conducts their business
activity at global level (Liñán, Nabi and Krueger, 2017). Firstly, when entrepreneurs conduct
their business operations globally it eventually leads to high employment generation. Due to the
expansion in the various countries, a large number of jobs are being created. This enables in
generating income of people and it ultimately increases the employment ratio of that country.
This in turn increases the overall economic stability and thus contributes towards the economic
development. This is one of the major aspect where international entrepreneurship contributes
towards the economic development to a high extent.
Besides creation of the job and increasing employment rates in country, international
entrepreneurship also contributes towards increasing the GDP of the country. For example- when
entrepreneur take their business in different countries and conducts their business then it results

offering products and services to people. This results in generating sales and fulfilling people
needs. Through it, economic growth occurs within the country and thus this eventually raises the
overall GDP. Besides this, due to operations in foreign country the foreign exchange rate also
increases and thus it eventually leads to the economic development (Zahra, Neubaum and
Hayton, 2016).
The international entrepreneurship helps in the economic development of the country in
variety of ways. It has been reported that innovation capability of the small firms are high and
thus when they bring various innovative products within the country to fulfill the needs and
demands of customers then this leads to expansion of economy. Innovative products eventually
increase the standard of living of large number of people and their spending on various major
sector increases. It enhances social life of people and raises their expenditure. This ultimately
contributes towards economic development of country (Liang, Wang and Lazear, 2018).
Here, new businesses enters in new market. A business concept can be either online or
offline. furthermore, the main aim of internationalization is to expand in other countries.
International entrepreneurship is process in which an entrepreneur conduct business in other
countries. in this new businesses expands into other countries. Usually, they are start up that
offers new products and services to fulfill people needs. The international expansion can be
either licensing, export, etc. products and services into other country. International
entrepreneurship have a great impact upon economic development and thus helps in increasing
economy (Schwens, Zapkau and Kabst, 2018).
On contrary, economic development is growth of an economy. In this social life of people
increases. Thus, this results in economic development. An entrepreneur plays an important role
in economic development of nation. This is because they come up with new ideas and innovation
to enhance social life of people. It is done by offering new products and services to fulfil needs.
Besides that, there are various types of entrepreneurship styles as well such as social, lifestyle,
etc. these all possess similar traits and characteristics as they want to improve social life of
people by providing them new products and services. It is evaluated that entrepreneurship
contribute towards economic development in many ways. This can be stated that capital
formation occurs. Here, public investment is made through entrepreneurship by utilization of
national resources. This results in increasing rate of capital formation as wealth is generated
through it. Moreover, per capita income improves as land, labor, etc. are used (Dimitratos,

Johnson and Young, 2016). With that social lifestyle of society improves. They are able to get
new products and services which fulfills their needs and desires, Alongside, employment is
generated as entrepreneurship provides jobs to people. Thus, it results in reducing unemployment
in nation and leading to economic development. In addition, through entrepreneurship regional
disparities are removed. this is because they set industries in rural areas and it leads to economic
development. So, it is stated that entrepreneurship contribute towards economic development.
Furthermore, the contribution is in terms of innovation as well. It can be stated that new
products and services are offered. besides that, new technology is also used which makes it
providing new software and applications to people. the other industries are also able to
implement and use advance technology and innovation. So, it can be evaluated that
entrepreneurship contribute in economic development. they impact in positive way as new
products are innovated to fulfil their needs
As critiqued by Elston and Weidinger, 2019, there are some theories of international
entrepreneurship which is applied here. Here, international theory is applicable which states that
multiple enterprise developed subsidiaries abroad in order to enhance company technology
advantage. It states that production and process are handled and managed effectively by MNC.
The conventional internalization theory has focused on imperfections in the external markets for
knowledge transfer and not enough attention has been given to both the nature and significance
of the transactions costs associated with the internal transfer of knowledge. It only consider value
of technology transfer and eliminate the other elements such as acquisition, transmission, etc. of
resources. However, it has to be change in avenues like increase in opportunities for developing
new products. In this location, ownership and facilities are basic three features in it. Apart from
it, theory is linked with economic and strategy as well. in economic it include transaction cost
and resource based theory. Along with it, the MNC has to align with their supply chain so that
competitive international environment.
But on contrary Cussen and Cooney, 2019, stated that the theory also focuses on
intermediate products which are categorized into two that is knowledge based and other one is
R&D based. Also, there is need to evaluate IPR so that knowledge can be protected.
Internalization allows firm to expand into new market by doing foreign investment. They are
allowed to work in unfamiliar foreign environment. Other than this, firms who are not having
any knowledge about market may not be able to survive or expand at international level. Here,

public investment is made through entrepreneurship by utilization of national resources. This
results in increasing rate of capital formation as wealth is generated through it. Moreover, per
capita income improves as land, labor, etc. are used. With that social lifestyle of people is
enhanced as well. they are able to get new products and services at low cost. Therefore, their
needs are fulfilled (Ratten, Ramadani and Ferreira, 2017). Alongside, employment is generated
as entrepreneurship provides jobs within society. thus, it results in reducing unemployment in
nation and leading to economic development.
Autio, 2017 said that there are some theories of entrepreneurship. The innovation theory
states that entrepreneur not only conduct business to improve life of people but also to bring
advancement in society as well as economy. So, it is argued that entrepreneur is built with by
growing creative and having a vision. thus, when a new product is launched this is done to solve
the problem that exists within society. Moreover, in order to earn and generate more revenue
new product is innovated by entrepreneur. therefore, it results in decrease in cost of production.
an entrepreneur by bringing innovation in market provides vast number of opportunities. this is
done by identifying growth opportunities in an economy. another theory of entrepreneurship is
need for achievement theory. this state that not everyone is capable of becoming an entrepreneur.
those who want to become must possess a need for achievement. through this the personality is
reflected. also, need for achievement acts as a motivational factor for entrepreneur. this is
because it leads to social and economic development. However, it has been determined that
entrepreneur want to achieve success so this influence their minds and urge them to become
entrepreneur. they are able to maintain and develop friendship with people. the theory was based
on an experiment done in which two conclusions was made about features of entrepreneurs. first
was that entrepreneur do things in new ways and second is to make decision in uncertain
conditions (Alayo, Maseda and Arzubiaga, 2019).
Thus, these all theories are state that entrepreneur is highly innovative in their task. they
are able to find out new ideas and implement it.
CONCLUSION
It can be summarised that economic development and international entrepreneurship are
directly linked to each other. this is because it highly contributes towards economic development
in many ways. for instance, there is rise in per capita income of people so it leads to economic
development. Alongside, employment is generated as entrepreneurship provide jobs to people.

moreover, the GDP of nation rises as well. New technology and innovation emerge that provide
new products and services to people. various innovative products within the country to fulfill the
needs and demands of customers then this leads to expansion of economy. Innovative products
eventually increase the standard of living of society.

REFERENCES
Books and journals
Alayo, M., Maseda, A. and Arzubiaga, U., 2019. Internationalization and entrepreneurial
orientation of family SMEs: The influence of the family character. International Business
Review, 28(1), pp.48-59.
Autio, E., 2017. Strategic entrepreneurial internationalization: A normative framework. Strategic
Entrepreneurship Journal, 11(3), pp.211-227.
Cussen, N. and Cooney, T., 2019. Exploring alternative approaches to entrepreneurial exporting:
internationalization through an effectual lens. Small Enterprise Research, 26(2), pp.164-
178.
Dimitratos, P., Johnson, J.E. and Young, S., 2016. SME internationalization: How does the
opportunity-based international entrepreneurial culture matter?. International Business
Review, 25(6), pp.1211-1222.
Elston, J.A. and Weidinger, A., 2019. Entrepreneurial intention and regional internationalization
in China. Small Business Economics, 53(4), pp.1001-1015.
Liang, J., Wang, H. and Lazear, E.P., 2018. Demographics and entrepreneurship. Journal of
Political Economy.126(S1). pp.S140-S196.
Liñán, F., Nabi, G. and Krueger, N. eds., 2017. Cultural Values and Entrepreneurship.
Routledge.
Ratten, V., Ramadani, V. and Ferreira, J., 2017. Family entrepreneurship and internationalization
strategies. Review of International Business and Strategy.
Schwens, C., Zapkau, F.B. and Kabst, R., 2018. International entrepreneurship: A meta–analysis
on the internationalization and performance relationship. Entrepreneurship Theory and
Practice, 42(5), pp.734-768.
Zahra, S.A., Neubaum, D.O. and Hayton, J.C. eds., 2016. Handbook of research on corporate
entrepreneurship. Edward Elgar Publishing.