Abstract

We draw upon the economics literature, and the literature on knowledge spillovers in particular, to examine to what extent a country’s level of foreign direct investment (both inward and outward) and international trade (export and import) influence the export orientation of its entrepreneurs. We also examine the relationship between entrepreneurs’ export orientation and a country’s overall level of entrepreneurial activity. We test our hypotheses using macro-level data on 34 countries over a four-year time period (2002-2005). We find that a country’s outward foreign direct investment as well as its export and import positively influence entrepreneurs’ export orientation. We also find that the extent to which a country’s entrepreneurs engage in export-oriented activities affects the subsequent emergence of new businesses within the country’s borders. We discuss our findings, and point to the study’s implications and limitations.

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