Entrepreneurship and Innovation in Emerging Markets Exam Questions and Correct Answers Latest
Update 2024-2025 Already Passed
Emerging Markets - Answers Economies, often in developing countries, experiencing rapid
industrialization and growth, such as China and India.
Entrepreneurship - Answers The process of starting and running new businesses, often seen as a driver
of economic development and innovation.
Market Capitalization - Answers The total value of a company's outstanding shares of stock, used as an
indicator of its size in the market.
Economic Growth - Answers An increase in a country's production of goods and services over time, often
seen as a key indicator of economic development.
Subsistence Entrepreneurs - Answers Entrepreneurs who start small businesses primarily to generate a
livelihood for themselves and their families without plans for substantial growth or job creation.
Transformational Entrepreneurs - Answers Entrepreneurs who aim to create large, scalable businesses
that provide employment opportunities and drive economic growth.
Capital Constraints - Answers Limitations on the availability of financial resources, which can restrict the
growth potential of businesses, particularly in developing countries.
Labor Market Friction - Answers Obstacles in the labor market, such as strict regulations, that make it
difficult for businesses to hire, fire, or operate efficiently.
Small-Scale Industry Regulation - Answers Policies designed to protect small businesses from
competition, often by restricting larger firms from entering certain sectors, which can limit economic
growth.
Bimodal Firm Size Distribution - Answers A pattern seen in some economies where there are many very
small firms and a few very large firms, with fewer medium-sized firms.
Venture Capital-Backed Startups - Answers High-growth startups that receive investment from venture
capital firms, typically founded by experienced entrepreneurs or individuals from established
companies.
Panel Data - Answers Data collected from the same subjects repeatedly over time, often used to track
trends and patterns, such as employment transitions in entrepreneurship.
Human Capital and Entry into Entrepreneurship - Answers Entry into self-employment often involves
lower human capital and a need to support family; entry into business ownership (transformational
entrepreneurship) requires higher human capital and a readiness to take greater risks.
Characteristics of Transformational Entrepreneurs - Answers These entrepreneurs score higher in IQ,
risk-taking, motivation, and financial literacy compared to subsistence entrepreneurs.
, Global Entrepreneurial Characteristics (GEM Data) - Answers "Opportunity entrepreneurs" (similar to
transformational entrepreneurs) generally have higher education, lower fear of failure, and greater
confidence in their skills compared to subsistence entrepreneurs.
Prestige of Entrepreneurship in Developing Countries - Answers Survey data reveals high social prestige
associated with transformational entrepreneurship in emerging markets, with younger CEOs showing a
stronger preference for entrepreneurship over traditional roles.
Regulation and Entrepreneurial Prestige - Answers Higher regulation correlates with lower prestige for
entrepreneurship, especially in poorer countries where successful entrepreneurial role models may be
fewer.
Policy Implications for Developing Economies - Answers A strong appreciation exists for
transformational entrepreneurship, indicating potential for growth if supported by policies that address
barriers like regulation and enhance the social status of entrepreneurs.
Transformational Entrepreneurship - Answers Entrepreneurs focused on high-growth, innovative
ventures that drive substantial economic change, often constrained by regulatory and financial barriers
in developing countries.
Labor and Product Market Regulation - Answers Rules and policies governing business entry, hiring, and
operations, which can limit new businesses' ability to compete on an equal footing, particularly
impacting transformational entrepreneurs.
Access to Capital - Answers The availability of financial resources necessary for starting and growing
businesses; often limited in emerging markets, where high lending rates and regulatory hurdles restrict
access.
Social Networks and Regulatory Impact - Answers In environments with tight labor regulations, social
connections become crucial, but over-reliance may lead to nepotism, misallocation of resources, and
lower economic efficiency.
Administrative Barriers - Answers High costs and delays in business registration deter new business
formation and hinder formalization, as seen in studies of Lima's licensing reform, which greatly reduced
entry barriers and encouraged formal registrations.
Regulatory Tax - Answers Informal demands like bribes or fines imposed by officials on successful
businesses, creating a "tax" on growth that disproportionately affects transformational entrepreneurs.
Credit Supply Shocks - Answers Situations where changes in credit availability allow observation of
growth potential; studies show that relaxing credit constraints can significantly impact firm growth in
constrained markets (e.g., Banerjee and Duflo's study in India).
