Economics: International Entrepreneurship
Business groups are critically important in many economics and with the rise of economics around the world, entrepreneurs also evolve by emerging to the international level which are to improve their own products or sales. Business groups also help drive globalization in many countries. Overseas exports by large Korean chaebol, for example, accounted for 53% of Korea’s GDP in 2002 but 82% in 2012 (Pesek, 2013). Most people usually refer entrepreneurship as businessman and the ones who are slowing or forestalling the countries from falling into recession (Ranjan, 2012).
Academic literature in the last decade has been developing in consideration to the phenomenon in firm establishment, caused by innovative entrepreneurship (Aparicio, Urbano , & Audretsch, 2016; Carree, van, Thurik, & Wennekers , 2007; Freytag & Thurik, 2007). The particular recognition is due to generation of economic development and social progress at the country and regional level have been positively afflicted by phenomenon of innovative entrepreneurship (Acs, Arenius , Hay, & Minniti, 2004; Acs, Desai, & Klapper, 2008). Moreover, it gives out a huge positive impact on economic development of the countries which supports entrepreneurs to seek out innovative ideas as they are able to create economic activities by providing and earning wealth as well as opening opportunities of employments in the country.
Therefore, entrepreneur’s role in innovating is crucial to help the rise of one’s country’s value (Acs , Audretsch, Braunerhjelm, & Carlsson , 2012; Audretsch, Bonte, & Keilbach, 2008; Avlonitis & Salavaou, 2007; Beugelsdijk, 2007; Busenitz , et al., 2003; Carlsson , et al., 2013; Diaz, Gonzales, Sanchez, Coduras , & Hernandez, 2013; Feldman, 2013; Ribeiro & Peris-Ortiz, 2011; Urbano & Aparicio, 2016). Aside from benefitting the country, they travel abroad to find unique opportunities that could be possible for innovation by seeing things from new perspective.
As often defined by many entrepreneurs, ‘innovation’, is to improve or change by creating a new idea to enhance existed products, services or any assets. Innovation is critical as no countries wish to face recession, the entrepreneurs play their role with their ideas that bring impressive benefits to help their country’s economic and development grow with innovations (Teece 1986). For example, when automotive meets gaming, BMW iDrive system implemented the controller of a video game industry to ease a complex navigation system (Vullings & Heleven, n.d.). Moving on, a country which is famous for local innovation is Japan, one of it is underground bicycle garages where people just simply park your bike on the platform and the moment its user insert their card from there, the machine will automatically stow the bike underground. This method makes it more secured from thieves and any unwanted accidents. Moreover, cleaning out the streets from having too many bikes clustering outside has been made much easier and simpler (Freal, 2017). In many cases, the way one’s country uses effective methods of innovation may be the medium which leads them to become a strong country and one of the world’s biggest economy (Arabiya, 2017).
As time goes by, entrepreneurships have been catching more public attentions. Since Entrepreneurship gradually becomes a growing field of study, more people ‘are’ and ‘will be’ involved in entrepreneurships. It inspires competitions to emerge and allows the environment around them to compete which bring impacts on globalizations effects as well. Traditionally, the explanation of social progress has been based on economic terms depending on GDP. However, in recent years, some scholars have been captivated by a more people-oriented approach (Engelbrecht, 2014; Porter , 2013; Stiglitz, Sen , & Fitoussi, 2009). For instance, the Social Progress Index (Porter , 2013) using an index that aggregated three dimensions aiming to measure development beyond GDP to know basic human demands, the foundations of well-being and opportunity. Other recent incentives, such as, the Indices of Social Development (ISD) of the Institute of Social Studies (ISS) is exceptionally concentrated to spread awareness of human well-being. Building on this initiative, Social Progress Orientation (SPO) can promote social well-being by accounting values beyond economic terms. There has been an insufficient explicit and integrative approach when the extant literature was investigated on the impact of factors associated to different approaches to SPO on innovative entrepreneurial activity. As an outcome, some authors have used social capital (Anderson, Park, & Jack, 2007; Kwon , Heflin , & Ruef, 2013; Leyden & Link , 2015), others postmaterialist and social values (Turro, Urbano, & Peris-Ortiz, 2014; Uhlaner & Thurik, 2007), subjective well-being (Naude, Amoros, & Crist, 2014), masculine vs. femininity (Baum, et al., 1993) and power distance (Shane , 1993). There are various approaches usage from academia to complete innovative entrepreneurial activity (Bruton, Ahlstrom, & Lil, 2010; Freytag & Thurik, 2007).
This paper applies an international analysis to investigate the influence of SPO (Social Progress Orientation) on innovative entrepreneurship. Entrepreneurs who experiment with innovative processes to accomplish their new business, showing that they are driven by opportunity perceptions, which is one of (Schumpeter, 1911) explanation of an innovative entrepreneur. Driven by opportunity is another approach for innovative entrepreneurial activity acknowledged as Total entrepreneurial activity (TEA) (Aparicio, Urbano, & Audretsch , 2016). Corresponding to these authors, entrepreneurs who are motivated by opportunity perceptions tend to experiment with innovative processes to accomplish their new business, which is another of Schumpeter’s (1911) definition. Nonetheless, the counterpart of opportunity further exists and it is interpreted as entrepreneurial activity that is necessity driven (Reynolds, et al., 1998-2003), researches apply diverse theoretical perspective to study the economic, thus, it is also being evaluated by these two measures. Cross-sectional data from the Global Entrepreneurship Monitor (GEM) on innovative entrepreneurial activity is used in this research. They also used World Values Survey (WVS), the Hofstede Center (HC) and an unforeseen database to date to abetment with explanatory variables. They also require Control Variables to play a critical role in this study after all disparity in the entrepreneurial activity across countries are likewise correlated with different degree of development (van Stel, Carree, & Thurik, 2005). Therefore, the Human Development Index (HDI) from the United Nations Development Programme (UNDP), along with the percentage of female populations, GDP, health expenditures, age structure of population and unemployment rate from the World Development Indicators (WDI) of the world bank, benefit as control variables for the unobserved effects of the development which are not considered in the experiment to determine about SPO.
The outcome shows that business groups have mixed effects on innovation on one side, spontaneous high spirits affect positively in innovative entrepreneurial activity. However, when it comes to entrepreneurial necessity voluntary spirit together with self-expression, they generate a negative impact. This empirical study is associated with the determinants of innovative entrepreneurship, and other form of entrepreneurial activity at a country level scale and they are directed by necessity. Moreover, based on innovation, new insights are convenient for the design of policies when it comes to promotion of entrepreneurship with the former consideration to be an important piece of economic development (Urbano, Aparaicio, & Gomez, 2016; Audretsch, Bonte, & Keilbach , 2008; Baumol, 1990; Carlsson, et al., 2013).
This database is convenient for informal institutions along the permanent challenge of finding proxies (Bruton, Ahlstrom , & Li, 2010). Additionally, this research offers insight and implications for practitioners and policymakers. By understanding and being aware of the factors that promote new firm establishment, which is seen as a valid conduit for economic developent (Schumpeter, 1911), they could conduct actions respectively and correspondingly.
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