AMC Indian Journal of Entrepreneurship

Open Access Open Access  Restricted Access Subscription Access

Impact of Globalization on Entrepreneurial Risk


Affiliations
1 Chief Executive Officer, Asia Banking School, Avissawella Road, Maharagama, Colombo, Sri Lanka

   Subscribe/Renew Journal


Globalization refers to the process of integration of the world into one huge market whereby it provides several opportunities to several people with the removal of all trade barriers among countries. Thus, economic activities of the world are influenced by globalization processes and globalization transfer. The risk for entrepreneurs is affected by economic crisis, political crisis, and technology crisis. Globalization has influenced blue-chip firms, small-scale businesses, and entire business world. This study assesses the impact of globalization on small and medium entrepreneur’s risk, focusing on Colombo districts’ small and medium apparel as well as tourist restaurants. Past literature had revealed the relationship between globalization and entrepreneurship using secondary and primary data and these used several models which had effectively proven the relationship of globalization and entrepreneur risk. A sample frame of 250 was selected using non- probabilistic sampling technique. 150 small and medium apparel enterprises were selected from the Colombo district and 100 small and medium tourist restaurants were also selected from the Colombo district. Face to face interview method was used for primary data collection. Secondary data were collected from reports of census and statistics department, and central bank. As a research model, canonical correlation and Manova were used to present the result of the data. SPSS and MS Excel were used to analyze the collected data. Apropos of the main findings of the study, there exist a positive correlation between globalization and entrepreneurial risk. Hence, it is imperative (sine qua non) for entrepreneurs to avoid risk factors of globalization due to the fact that risk causes huge damage to business by keeping continuous savings, joining ventures, issuing shares, and considering innovative investments as are the solutions to avoid the risk of globalization. This research contributes new knowledge to mitigate globalization related risks of entrepreneurship.

Keywords

Canonical Correlation, Entrepreneurship, Entrepreneurial Risk, Globalization, Small and Medium Enterprises.
User
Subscription Login to verify subscription
Notifications
Font Size

  • Aimiuwu, L.E.A. (2004). Globalization: The human resource management challenge in Nigeria. Journal of Nigerian Institute of Management, 39/40 (1/2), 19–28.

  • Ali, M. A. (2005). Globalization and industrial relations of China, India and Korea: An argument for divergence. Rhode Island Journal. University of Rhode Island, 7(1), 160–165. Seminar Research Paper Series. Paper 17. http://digitalcommons.uri.edu/lrc_paper_series/17?utm_source=digitalcommons.uri.edu%2Flrc_paper_series%2F17&utm_medium=PDF&utm_campaign=PDFCoverPages

  • Castells, M. (2000). The contours of the network society. Foresight, 2(2), 151–157. https://doi.org/10.1108/14636680010802591

  • Deo, S. (2013). Impact of globalization on small business enterprises, pp. 1–14. Wintec: Centre for Business, Information, Technology and Enterprise.

  • Fama, E. F. (1980). Agency problems and the theory of the firm. Journal of Political Economy, 88(2), 288–307. https://www.jstor.org/stable/1837292

  • Gaburro, G. & O'Boyle, E. (2003). Norms for evaluating economic globalization. International Journal of Social Economics, 30(95), 95–118. https://doi.org/10.1108/03068290310453628

  • Giddens, A. (1991). Modernity and self-identity : Self and Society in the late modern age, pp. 32–40. Stanford: Stanford University Press.

  • Gray, M. M., Kittilson, M. C., & Sandholtz, W. (2006). Women and globalization: A study of 180 countries, 1975–2000. International Organization, 60(2), 293–333.

  • Hartungi, R. (2006). Could developing countries take the benefit of globalization. International Journal of Social Economics, 33(11), 728–743.

  • Hirst, P. & Thompson, G. (1995). Globalization and the future of nation state. Economy and Society Journal, 24(3), 408-442. https://doi.org/10.5937/socpreg55-30309

  • Hitt, M.A., Ireland, R.D., Camp, S. M., & Sexton, D. L. (2001). Strategic entrepreneurship: Entrepreneurial strategies for wealth creation. Strategic Management Journal, 22(6–7), 479–491. https://doi.org/10.1002/smj.196

  • Knight, F. H. (1921). Cost of production and price over long and short periods. Journal of Political Economy, 29(4), 304–335. https://doi.org/10.1086/253349

  • Lane, P. R. & Milesi-Ferretti, G. M. (2004). International Investment Patterns [CERP Discussion Paper], Institute for International Integration Studies, Ireland. https://poseidon01.ssrn.com/delivery.php?ID=118071094081103005123086004029004120051002022033030034120117017109120078005100021106002028029055022035011124095088087121005026005095045051028013088087008118076095039015024082110093003001088125020081098120081000112100027081029075122097072072085020&EXT=pdf&INDEX=TRUE

  • Open Yearbook. (2003). International Textile, Garment and Leather Workers' Federation Report 2003. http://www.uia.org/s/or/en/1100047837

  • Prus. (2001). Globalization and poverty. Poverty Research Unit, 2(1). University of Sussex.

  • Piasecki, R. & Wolnicki, M. (2004). The evolution of development economics and globalization. International Journal of Social Economics, 31(3), 300–314. https://doi.org/10.1108/03068290410518274

  • Rajan, G. R., & Zingales, L. (1998). Financial Dependence and Growth. The American Economic Review, 88(3), 559–586. http://www.jstor.org/stable/116849

  • Shahabadi, M. M. M., Abdol, S., & Etemad, R. (2013). Effect of globalization on entrepreneurship : An economical point of view. International Journal of Management and Humanity Sciences, 2(S), 1033–1038.

  • Shangquan, G. (2000). Economic globalization: Trends, risks and risk prevention [CDP Background Paper No. 1]. Economic & Social Affairs, 5(1), 102–106.

  • Siriginidi, S. R. (1996). Business information: Its sources and role in globalization. New Library World, 97(1), 22–28. https://doi.org/10.1108/03074809610105619

  • Smith, A. (1776). An inquiry into the nature and causes of the wealth of nations. London. for W. Strahan and T. Cadell.

  • Stiglitz, J. E. (2000). Capital market liberalization, economic growth, and instability. World Development, 28(6), 1075–1086. https://doi.org/10.1016/S0305-750X(00)00006-1


Abstract Views: 337

PDF Views: 0




  • Impact of Globalization on Entrepreneurial Risk

Abstract Views: 337  |  PDF Views: 0

Authors

K. G. N. W. Abeyrathna
Chief Executive Officer, Asia Banking School, Avissawella Road, Maharagama, Colombo, Sri Lanka

Abstract


Globalization refers to the process of integration of the world into one huge market whereby it provides several opportunities to several people with the removal of all trade barriers among countries. Thus, economic activities of the world are influenced by globalization processes and globalization transfer. The risk for entrepreneurs is affected by economic crisis, political crisis, and technology crisis. Globalization has influenced blue-chip firms, small-scale businesses, and entire business world. This study assesses the impact of globalization on small and medium entrepreneur’s risk, focusing on Colombo districts’ small and medium apparel as well as tourist restaurants. Past literature had revealed the relationship between globalization and entrepreneurship using secondary and primary data and these used several models which had effectively proven the relationship of globalization and entrepreneur risk. A sample frame of 250 was selected using non- probabilistic sampling technique. 150 small and medium apparel enterprises were selected from the Colombo district and 100 small and medium tourist restaurants were also selected from the Colombo district. Face to face interview method was used for primary data collection. Secondary data were collected from reports of census and statistics department, and central bank. As a research model, canonical correlation and Manova were used to present the result of the data. SPSS and MS Excel were used to analyze the collected data. Apropos of the main findings of the study, there exist a positive correlation between globalization and entrepreneurial risk. Hence, it is imperative (sine qua non) for entrepreneurs to avoid risk factors of globalization due to the fact that risk causes huge damage to business by keeping continuous savings, joining ventures, issuing shares, and considering innovative investments as are the solutions to avoid the risk of globalization. This research contributes new knowledge to mitigate globalization related risks of entrepreneurship.

Keywords


Canonical Correlation, Entrepreneurship, Entrepreneurial Risk, Globalization, Small and Medium Enterprises.

References





DOI: https://doi.org/10.17010/amcije%2F2021%2Fv4i2-3%2F164695