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Entrepreneurship and Innovation: Multiple Choice Questions and Answers, Exams of Business Economics

Global UniversityBusiness Economics

A comprehensive set of multiple choice questions (mcqs) with answers covering key concepts in entrepreneurship and innovation. the questions delve into various aspects of entrepreneurship, including definitions, theories, internationalization strategies, and the role of small firms. it's a valuable resource for students to test their understanding and reinforce their learning.

Typology: Exams

2024/2025

Available from 05/05/2025

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Test Bank For
Global Entrepreneurship & Innovation Sarika Pruthi, Jay Mitra
Chapter 2-15
MCQs with answers
Chapter 2: Entrepreneurship and small firms
1.According to the chapter, ______ are individuals who start new business ventures.
a. Employees
b. Innovators
c. Entrepreneurs
d. Inventors
Ans: C
2. According to the French economist, Jean Baptiste Say, entrepreneurs are defined as
individuals who:
a. Reduce costs of abundant resources
b. Add value to abundant resources
c. Reduce costs of scarce resources
d. Add value to scarce resources
Ans: D
3. In introducing innovations, entrepreneurs destroy existing markets and create new ones.
This is Schumpeter‟s idea of______:
a. Creative destruction
b. Commercialization
c. Creative creation
d. Invention
Ans: A
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Test Bank For

Global Entrepreneurship & Innovation Sarika Pruthi, Jay Mitra Chapter 2-

MCQs with answers

Chapter 2: Entrepreneurship and small firms

1.According to the chapter, ______ are individuals who start new business ventures. a. Employees b. Innovators c. Entrepreneurs d. Inventors Ans: C

  1. According to the French economist, Jean Baptiste Say, entrepreneurs are defined as individuals who: a. Reduce costs of abundant resources b. Add value to abundant resources c. Reduce costs of scarce resources d. Add value to scarce resources Ans: D
  2. In introducing innovations, entrepreneurs destroy existing markets and create new ones. This is Schumpeter‟s idea of______: a. Creative destruction b. Commercialization c. Creative creation d. Invention Ans: A
  1. Individuals who hold or have held a minority or majority ownership stake in two or more firms, at least one of which was established or purchased are called______: a. Novice entrepreneurs b. Solo entrepreneurs c. Corporate entrepreneurs d. Habitual entrepreneurs Ans: D
  2. Large firms like GE and Motorola are increasingly employing entrepreneurial thinking to enhance their futures. This phenomenon is an example of______: a. Technical entrepreneurship b. Academic entrepreneurship c. Social entrepreneurship d. Corporate entrepreneurship Ans: D
  3. ______ of entrepreneurship propose that entrepreneurs perceive market gaps or identify unnoticed opportunities. a. Cognitive theories b. Personality theories c. Psycho-sociological theories d. Network theories Ans: A
  4. All of following are qualitative features of small firms, except: a. Small number of employees b. Informal culture c. Lack of market power d. Informal structure and organization

Chapter 3: Comparative development of entrepreneurship

  1. According to the findings of the GEM (2018) study, early-stage entrepreneurial activity is more likely to be opportunity-driven in high-income countries and necessity-driven in low-income countries. a. True b. False Ans: A
  2. Total Entrepreneurial Activity (TEA) index refers to the percentage of adult population that: a. Has taken some action towards creating a new business in the past year b. Are owner/managers of an active business less than 42 months old c. Have sold a business in the past year d. Both A and B Ans: D
  3. In general, compared to social/cultural and technological factors, political and economic factors have a greater impact on the development of entrepreneurship in a country. a. True b. False Ans: B
  4. According to the chapter, controlled economies are more likely to foster entrepreneurship than market-oriented economies. a. True b. False Ans: B
  1. Interest and tax rates are useful measures for evaluating the role of economic factors in the international development of entrepreneurship. a. True b. False Ans: A
  2. Cultural factors that influence the international development of entrepreneurship refer to all the following, except: a. Power distance b. Uncertainty avoidance c. Wellness Index d. Long-term orientation Ans: C
  3. According to the chapter, GEM refers to: a. Greater entrepreneurship monitor b. Global entrepreneurship measure c. Greater entrepreneurship mentor d. Global entrepreneurship monitor Ans: D
  4. According to the chapter, government intervention to spur the international development of entrepreneurship can take all the following forms, except: a. Investment in education b. Investment in community housing c. Investment in research & development d. Investment in training Ans: B
  1. According to the Stages Model of internationalization, the internationalization of small firms is a process of rapid resource commitments and large, spectacular investments in foreign markets. a. True b. False Ans: B
  2. The psychic distance paradox means that there is no concrete evidence to show that high resource commitments increase the costs of full-control modes when psychic distance is high. a. True b. False Ans: A
  3. Uppsala internationalization (U) models and innovation-related (I) models are two slightly different perspectives of the Stages Model. a. True b. False Ans: A
  4. According to the Stages Model of internationalization, small firms prefer to first enter countries that: a. Have no barriers to entry b. Are psychically close c. Have strong rivalry between firms d. Are strong social and cultural values Ans: B
  1. Markets are seen as a system of relationships among a number of players including customers, suppliers, competitors, family, friends and private and public support agencies according to: a. Stages theory b. Network theory c. Resource-based theory d. All of these Ans: B
  2. According to the______ theory, decisions on firm‟s internationalization are made in the context of overall strategic development and guided by an analysis of both internal and external factors: a. Stages b. Network c. Resource-based d. Transaction cost Ans: C
  3. According to the chapter, which of the following decision-makers‟ characteristics is/are most strongly associated with the likelihood of small firm internationalization: a. Decision-makers‟ age b. Decision-makers‟ education c. Decision-makers‟ international orientation d. All of these Ans: C
  4. A key criticism of the stages model of internationalization is that it does not explain customer followership in small firms. a. True b. False

a. Setting up partnership agreements b. Selecting the right partner b. Managing relationships with a foreign partner d. All of these Ans: D

  1. A European entrepreneur entering a foreign country for business found that there were numerous complex government regulations her company needed to meet before closing the deal. Which of the following barriers to foreign market entry was this entrepreneur experiencing? a. Technological b. Political c. Cultural d. Economic Ans: B
  2. According to the chapter, indirect exporting involves selling goods to another country through a foreign buyer or export management firm in the entrepreneur‟s home country: a. True b. False Ans: A
  3. When two firms get together and form a third company in which they share equity, the third entity thus formed is called a: a. Joint venture b. Merger c. Strategic alliance d. Equal partnership structure Ans: A
  1. An arrangement in which an entrepreneur gives a foreign manufacturer the right to use a patent, trademark, or technology in return for a royalty payment, is called: a. Direct exporting b. Equity arrangement c. Licensing d. Joint venture Ans: C
  2. A joint venture is an appropriate choice of entry into a foreign market when: a. The entrepreneur wants to share the costs and risks of an uncertain project b. The firms involved expect to gain synergy through complementary strengths c. The entrepreneur wants access to local knowledge d. All of these Ans: D
  3. To ensure complete control of international operations, an entrepreneur should select the ______ arrangement. a. Licensing b. Turn-key operation c. 100% ownership d. Joint venture Ans: C
  4. According to the chapter, even though SMEs are more likely to engage in indirect and direct exports, their internationalization strategies are not restricted to exports. a. True b. False Ans: A

MCQs with answers

  1. According to the chapter, which of the following sources of labour is often a critical source of competitive advantage for ethnic businesses: a. Industrial labour b. Family labour c. Regional labour d. Institutional labour Ans: B
  2. According to chapter, the role of the family in ethnic minority enterprises is frequently „double-edged‟. This means that: a. Family always plays a positive role in the business b. Family can sometimes get in the way of business c. Family has no role in the business d. Family always plays a negative role in the business Ans: B
  3. The term ______ refers to those individuals whose group membership is tied to a common cultural heritage or origin and are known to out-group members as having such traits. a. Immigrant entrepreneurs b. Transnational entrepreneurs c. Minority entrepreneurs d. Ethnic entrepreneurs Ans: D
  4. According to the chapter, „class resources‟ that explain ethnic entrepreneurship refer to: a. Tangible resources like property and finance, and less tangible resources like contacts, information networks and self confidence b. Tangible resources like contacts, information networks and self-confidence, and less tangible resources like property and finance c. Tangible resources like property and finance

d. Less tangible resources like contacts, information networks and self confidence Ans: A

  1. According to the „Reaction Model‟ of ethnic entrepreneurship, self-employment is a survival strategy borne out of the persistent discrimination that ethnic minorities face in the host country labor market. a. True b. False Ans: A
  2. According to the chapter, ______ are those entrepreneurs who take advantage of ethnic resources such as language, networks and skills to trade between their host and origin societies, while retaining their ethnic identity and non–assimilation stance as an integral part of their business strategy. a. Immigrant entrepreneurs b. Middleman minorities c. Transnational entrepreneurs d. Ethnic entrepreneurs Ans: B

MCQs with answers

Chapter 9: New immigrant entrepreneurs

  1. According to the chapter, the following two Asian groups are the fastest growing groups of skilled immigrants in Silicon Valley: a. Indian and Chinese b. Chinese and Korean c. Indian and Korean d. Chinese and Mexican

c. The older generation help younger professionals organize cultural events d. None of these Ans: B

  1. The emerging connections between Silicon Valley and regions in China and India based on the informal ties of Silicon Valley‟s immigrant entrepreneurs create losses for Silicon Valley investors. a. True b. False Ans: B
  2. According to the chapter, The Indus Entrepreneurs (TiE) is an example of: a. Ethnic entrepreneurs b. Transnational entrepreneurs c. Ethnic networks d. Returnee entrepreneurs Ans: C
  3. According to the chapter, successful founders of high-growth start-ups in the USA share extensive ______ experience which increases individuals‟ capabilities to identify promising business ideas and stimulates creativity, making them more entrepreneurial. a. Industry b. International c. Start-up d. Cross-cultural Ans: D
  4. ______ are individuals that migrate from one country to another, concurrently maintaining business-related links with their countries of origin and currently adopted countries. a. Transnational entrepreneurs

b. Immigrant entrepreneurs c. New immigrant entrepreneurs d. Ethnic entrepreneurs Ans: A

  1. The distinctive dimensions of TEs are all, except: a. Frequent travel between host and home countries b. Simultaneous entrepreneurial engagement in at least two countries c. Dual embeddedness in host and home institutional environments d. Unskilled migrants Ans: D

MCQs with answers

Chapter 10: Returnee entrepreneurs

  1. ______ are scientists and engineers, or students who were trained or studied/ worked in OECD countries, and returned to their native countries to set up new ventures. a. Immigrant entrepreneurs b. Transnational entrepreneurs c. Returnee entrepreneurs d. Ethnic entrepreneurs Ans: C
  2. According to the chapter, most studies are focused on returnees to Asia and, in particular, - ______ that has facilitated the education of its citizens abroad for many decades. a. China b. India c. Vietnam d. Taiwan

c. Lack of social networks in their home country d. All of these Ans: D

  1. According to the chapter, accumulated human capital in the form of education and experiences from abroad is significantly associated with self-employment among returning migrants because capital accumulation from abroad compensates for the loss of REs‟: a. Social capital in the home country b. Financial capital in the home country c. Social capital in the host country d. Financial capital in the host country Ans: A
  2. According to Vandor and Franke (2016), students who have spent time studying abroad are able to come up with better business ideas due to ______ gained abroad. a. Financial knowledge b. Industry-specific knowledge c. Industry-specific experience d. Cross-cultural experience Ans: D
  3. According to the evidence presented in this chapter, which of the following statements is incorrect: a. REs follow an early internationalization path for their ventures b. REs contribute to the economic development of their home country c. The social impact of REs in their home country is minimal d. REs‟ background and characteristics impact the performance of their ventures Ans: C
  1. REs predominantly use their networks acquired abroad because: a. REs feel „out of touch‟ with local networks in the home country b. REs have more diverse networks from abroad compared to their domestic counterparts who have not been abroad c. Networks acquired abroad are more valuable than local networks d. All of these Ans: B

MCQs with answers

Chapter 12: International new ventures and global start-

ups

  1. An INV is a business organization that from inception seeks to derive significant competitive advantage from the use of resources and sale of outputs in multiple countries. a. True b. False Ans: A
  2. In the Theory of INVs, INVs refers to: a. International New Visions b. Internal New Ventures c. International New Ventures d. Internal New Visions Ans: C
  3. According to Oviatt and McDougall (1994), foreign location advantages are the advantages of private knowledge to overcome traditional disadvantages (such as local regulations) vis-à-vis indigenous firms in foreign markets. a. True