Selling, Passing on or Closing? Determinants of Entrepreneurial Intentions on Exit Modes
AbstractExit 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.
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Bibliographic InfoPaper provided by Institute of Economic Research, Hitotsubashi University in its series Global COE Hi-Stat Discussion Paper Series with number gd10-151.
Date of creation: Oct 2010
Date of revision:
entrepreneurial exit; liquidation; small and medium enterprise (SME); New Zealand;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-26 (All new papers)
- NEP-BEC-2011-02-26 (Business Economics)
- NEP-CSE-2011-02-26 (Economics of Strategic Management)
- NEP-ENT-2011-02-26 (Entrepreneurship)
- NEP-HME-2011-02-26 (Heterodox Microeconomics)
- NEP-SBM-2011-02-26 (Small Business Management)
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