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Selling, Passing on or Closing? Determinants of Entrepreneurial Intentions on Exit Modes

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  • Martina Battisti
  • Hiroyuki Okamuro

Abstract

Exit is an important part of the entrepreneurial lifecycle. In contrast to numerous previous studies on entry, however, little attention has been paid to entrepreneurial exit, and much less on exit modes thus far. Using a recent original survey data on small business owners in New Zealand, where a large majority of them prefer selling their firms when they exit, we empirically investigate the determinants of intended entrepreneurial exit modes: selling out, succession, or closure. Estimation results of multinomial logit analysis suggest that the intention to sell the business is significantly affected by the size and performance of the firm, the involvement of family and how the owner entered the business. Moreover, we find that the intention to liquidate the business is significantly affected by the size and performance of the firm and partly by family involvement in the business.

Suggested Citation

  • Martina Battisti & Hiroyuki Okamuro, 2010. "Selling, Passing on or Closing? Determinants of Entrepreneurial Intentions on Exit Modes," Global COE Hi-Stat Discussion Paper Series gd10-151, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hst:ghsdps:gd10-151
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    File URL: http://gcoe.ier.hit-u.ac.jp/research/discussion/2008/pdf/gd10-151.pdf
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    Cited by:

    1. Georgeanne M. Artz & Zizhen Guo & Peter F. Orazem, 2016. "Location, Location, Location: Place-Specific Human Capital, Rural Firm Entry and Firm Survival," Center for Agricultural and Rural Development (CARD) Publications apr-winter-2016-1, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    2. Joensuu-Salo, Sanna & Viljamaa, Anmari & Varamäki, Elina, 2019. "The Impact of Continuity Outlook and Development Activities on Growth Intentions," 7th International OFEL Conference on Governance, Management and Entrepreneurship: Embracing Diversity in Organisations (Dubrovnik, 2019), in: 7th International OFEL Conference on Governance, Management and Entrepreneurship: Embracing Diversity in Organisations. April 5th - 6th, 2019, Dubrovn, pages 388-399, Governance Research and Development Centre (CIRU), Zagreb.
    3. Kay, Rosemarie & Pahnke, André & Schlepphorst, Susanne, 2018. "The impact of firm performance on the business transfer mode," Working Papers 04/18, Institut für Mittelstandsforschung (IfM) Bonn.
    4. Eugene Kaciak & Izabela Koladkiewicz & Narongsak (Tek) Thongpapanl & Marta Wojtyra, 0. "The role of social networks in shaping entrepreneurial exit strategies," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-37.
    5. Eugene Kaciak & Izabela Koladkiewicz & Narongsak (Tek) Thongpapanl & Marta Wojtyra, 2021. "The role of social networks in shaping entrepreneurial exit strategies," International Entrepreneurship and Management Journal, Springer, vol. 17(4), pages 1619-1655, December.
    6. Aapo Länsiluoto & Elina Varamäki & Erkki K. Laitinen & Anmari Viljamaa & Juha Tall, 2015. "Management Control Systems in Small Business Transfers — A Resource-Based View," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 23(04), pages 449-471, December.
    7. Sanna Joensuu-Salo & Anmari Viljamaa & Elina Varamäki, 2021. "Understanding Business Takeover Intentions—The Role of Theory of Planned Behavior and Entrepreneurship Competence," Administrative Sciences, MDPI, vol. 11(3), pages 1-17, June.
    8. Alpeza Mirela & Mezulić Juric Petra & Tall Juha, 2018. "The Challenges of SME Business Transfers: The Evidence from Croatia and Finland," Organizacija, Sciendo, vol. 51(2), pages 135-145, May.

    More about this item

    Keywords

    entrepreneurial exit; liquidation; small and medium enterprise (SME); New Zealand;
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