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African Entrepreneurs and International Coordination in Petty Businesses: The Case of Low-End Mobile Phones Sourcing in Hong Kong

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  • Fu Lai Tony Yu
  • Diana S. Kwan

Abstract

This paper examines the contribution of African entrepreneurs to world trade through global coordination. Unlike the multinational giants which earn impressive profit through global sourcing, small African entrepreneurs survive by identifying opportunities in petty businesses and exploiting narrow profit margin. Through careful economic calculation, they buy low-end goods from one part of the globe and sell them in the other part. Their self-interest activities enhance global well-being. This paper begins with an Austrian perspective of international entrepreneurship and global coordination. The theory is illustrated by African entrepreneurs who source Shenzhen-made mobile phones in Hong Kong and sell them in Africa. By arbitraging price differentials, they earn pure entrepreneurial profit. A detailed case study of the global coordination of a Tanzanian entrepreneur will be presented. This paper concludes that, as a result of the effort of African entrepreneurs, low-end mobile phones manufactured in Shenzhen are shipped to Hong Kong and consumed by people in Tanzania, bringing benefits to all parties concerned. The case study fully illustrates the principle of the 'invisible hand' in the global market.

Suggested Citation

  • Fu Lai Tony Yu & Diana S. Kwan, 2015. "African Entrepreneurs and International Coordination in Petty Businesses: The Case of Low-End Mobile Phones Sourcing in Hong Kong," Journal of African Business, Taylor & Francis Journals, vol. 16(1-2), pages 66-83, January.
    • Handle: RePEc:taf:wjabxx:v:16:y:2015:i:1-2:p:66-83
    DOI: 10.1080/15228916.2015.1059156
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    References listed on IDEAS

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    1. World Bank, 2013. "World Development Indicators 2013," World Bank Publications - Books, The World Bank Group, number 13191, December.
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    Cited by:

    1. Asongu, Simplice & Odhiambo, Nicholas, 2020. "Social Media and Inclusive Human Development in Africa," MPRA Paper 103149, University Library of Munich, Germany.
    2. Uchenna R. Efobi & Belmondo V. Tanankem & Simplice A. Asongu, 2018. "Female Economic Participation with Information and Communication Technology Advancement: Evidence from Sub‐Saharan Africa," South African Journal of Economics, Economic Society of South Africa, vol. 86(2), pages 231-246, June.
    3. Asongu, Simplice A. & Le Roux, Sara & Biekpe, Nicholas, 2018. "Enhancing ICT for environmental sustainability in sub-Saharan Africa," Technological Forecasting and Social Change, Elsevier, vol. 127(C), pages 209-216.
    4. Asongu, Simplice A. & Odhiambo, Nicholas M., 2019. "Governance and social media in African countries: An empirical investigation," Telecommunications Policy, Elsevier, vol. 43(5), pages 411-425.
    5. Simplice A. Asongu & Nicholas M. Odhiambo, 2019. "Basic formal education quality, information technology, and inclusive human development in sub‐Saharan Africa," Sustainable Development, John Wiley & Sons, Ltd., vol. 27(3), pages 419-428, May.
    6. Simplice A. Asongu & Nicholas M. Odhiambo, 2018. "Human development thresholds for inclusive mobile banking in developing countries," African Journal of Science, Technology, Innovation and Development, Taylor & Francis Journals, vol. 10(6), pages 735-744, September.
    7. Simplice A. Asongu & Jacinta C. Nwachukwu & Aqsa Aziz, 2018. "Determinants of Mobile Phone Penetration: Panel Threshold Evidence from Sub-Saharan Africa," Journal of Global Information Technology Management, Taylor & Francis Journals, vol. 21(2), pages 81-110, April.
    8. Simplice A. Asongu, 2017. "ICT, Openness and CO2 emissions in Africa," Research Africa Network Working Papers 17/055, Research Africa Network (RAN).
    9. Simplice A. Asongu, 2020. "Technology, Education, Life and Non-life Insurance in Africa," International Journal of Public Administration, Taylor & Francis Journals, vol. 43(11), pages 915-925, August.
    10. Asongu, Simplice & le Roux, Sara & Nwachukwu, Jacinta & Pyke, Chris, 2018. "The Mobile Phone as an Argument for Good Governance in Sub-Saharan Africa," MPRA Paper 89364, University Library of Munich, Germany.
    11. Simplice A. Asongu & Vanessa S. Tchamyou & Paul N. Acha-Anyi, 2020. "Who Is Who in Knowledge Economy in Africa?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(2), pages 425-457, June.
    12. Uchenna R. Efobi & Belmondo V. Tanankem & Simplice A. Asongu, 2018. "Female Economic Participation with Information and Communication Technology (ICT) Advancement: Evidence from Sub-Saharan Africa," Research Africa Network Working Papers 18/005, Research Africa Network (RAN).
    13. But Dedaj & Gokcen Ogruk-Maz & Mjellma Carabregu-Vokshi & Luljeta Aliu-Mulaj & Khalid M. Kisswani, 2022. "Improving ICTs (Mobile Phone and Internet) for Environmental Sustainability in the Western Balkan Countries," Energies, MDPI, vol. 15(11), pages 1-13, June.

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