Factors contributing towards the Process of International Entrepreneurship: A Case Study of Light Engineering Units Operating in Gujranwala District

Abstract

The objective of this paper is to explore the importance of factors contributing towards the process of internationalization. Firm level characteristics, technological capabilities, commercial capabilities and factors inhibiting export activities are considered as the major factors affecting export performance in case of Light Engineering Units of Gujranwala District. Empirical data from a survey of 868 Light engineering units in Gujranwala District is being employed for analytical purposes out of which 209 units were found to be involved in export activities. Multinomial regression logistic model has been employed to find out the probability of being involved in internationalization process. Instrumental variable approach is being employed to encompass the role of innovation in the process of internationalization. The estimated results of instrumental equation are than incorporated in the basic model to find out the final estimation results. Results from the logit model represent that the factors of firm size, firm age, manufacturing status, affiliation with area wise trade union, average firm revenue, diversification (product mix), presence of registered trade-marks, participation in promotional activities through trade fairs, personal visits and references, availability of information, fitted values of innovation in terms of innovation in new product, new process and major improvements are found to besignificantly and positively correlated with the probability of being an international entrepreneur. While export restricting factors like, non-cooperative attitude on behalf of government organizations, financial problems and expensive foreign trips are found to be significantly and negatively associated with the probability of being international entrepreneur.