IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa10p1094.html
   My bibliography  Save this paper

Regional Influences of Business Transfers within the British Isles

Author

Listed:
  • Geraldine Ryan
  • Bernadette Power
  • Noreen McCarthy
  • Paul Braidford

Abstract

Objectives: Business transfers are posing a particular problem for several European countries as the age distribution of business owners rises and as the number of firms transferred within families' declines. This paper explores firm, market, and regional differences in firms which are expected to be transferred in the British Isles against those that are expected to be disposed of. It also examines whether there are regional differences in the types of businesses which are expected to be transferred across the British Isles. Prior Work: Previous research in this area has primarily examined intergenerational succession in family businesses (Bennedsen et al. 2006), while the research into management-buyouts and trade-sales has focused on the entrepreneur's mode of entry (Parker and Van Praag, 2006). Martin et al. (2002) finds evidence that spatial differentiation exists in the vulnerability of firms to age related business transfer failure. In this paper we examine whether businesses located in relatively more economically vibrant regions within the British Isles, whether due to urban economies (Gordon and McCann 2005) or agglomeration economies (Parr 2002) or the level of entrepreneurial talent (Markley, 2006) in the region, have a lower probability of a business transfer failure. Approach: Interview evidence on the expected end-game strategy of entrepreneurs facing the risk of age related transfer failure was obtained from firms in a number of regions in the British Isles, namely the Republic of Ireland, Northern Ireland, Scotland, Wales and England (800 cases). A model is developed which predicts how firm, market and regional characteristics influence whether a firm is expected to be transferred or not. Preliminary Results: Entrepreneurs who expect to dispose of the assets of the business on their retirement have a significantly lower probability of having a high level of entrepreneurial talent in the region and a higher probability of having a high level of GVA per head in the region than entrepreneurs who expect to transfer their businesses. A higher level of entrepreneurial talent (as measured by stock of businesses per resident) and a lower of GVA per head are more likely in rural regions.

Suggested Citation

  • Geraldine Ryan & Bernadette Power & Noreen McCarthy & Paul Braidford, 2011. "Regional Influences of Business Transfers within the British Isles," ERSA conference papers ersa10p1094, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa10p1094
    as

    Download full text from publisher

    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa10/ERSA2010finalpaper1094.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ronstadt, Robert, 1988. "The Corridor Principle," Journal of Business Venturing, Elsevier, vol. 3(1), pages 31-40.
    2. Mike Burkart & Fausto Panunzi & Andrei Shleifer, 2003. "Family Firms," Journal of Finance, American Finance Association, vol. 58(5), pages 2167-2201, October.
    3. Holtz-Eakin, Douglas & Joulfaian, David & Rosen, Harvey S, 1994. "Sticking It Out: Entrepreneurial Survival and Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 102(1), pages 53-75, February.
    4. Edward L. Glaeser & Matthew E. Kahn & Jordan Rappaport, 2000. "Why Do The Poor Live In Cities?," Harvard Institute of Economic Research Working Papers 1891, Harvard - Institute of Economic Research.
    5. David B. Audretsch & A. Roy Thurik, 2000. "Capitalism and democracy in the 21st Century: from the managed to the entrepreneurial economy," Journal of Evolutionary Economics, Springer, vol. 10(1), pages 17-34.
    6. Aki Kangasharju, 1998. "Regional variation in firm formation: Panel and cross-sectional data evidence from Finland," ERSA conference papers ersa98p134, European Regional Science Association.
    7. Daniel W. Elfenbein & Barton H. Hamilton & Todd R. Zenger, 2010. "The Small Firm Effect and the Entrepreneurial Spawning of Scientists and Engineers," Management Science, INFORMS, vol. 56(4), pages 659-681, April.
    8. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, August.
    9. Wennberg, Karl & Wiklund, Johan & DeTienne, Dawn R. & Cardon, Melissa S., 2010. "Reconceptualizing entrepreneurial exit: Divergent exit routes and their drivers," Journal of Business Venturing, Elsevier, vol. 25(4), pages 361-375, July.
    10. Kristina Nyström, 2007. "An industry disaggregated analysis of the determinants of regional entry and exit," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 41(4), pages 877-896, December.
    11. Miller, Danny & Steier, Lloyd & Le Breton-Miller, Isabelle, 2003. "Lost in time: intergenerational succession, change, and failure in family business," Journal of Business Venturing, Elsevier, vol. 18(4), pages 513-531, July.
    12. Vickers, John, 1985. "Delegation and the Theory of the Firm," Economic Journal, Royal Economic Society, vol. 95(380a), pages 138-147, Supplemen.
    13. Leroy, H. & Manigart, S. & Meuleman, M., 2009. "The planned decision to transfer an entrepreneurial company," Vlerick Leuven Gent Management School Working Paper Series 2009-13, Vlerick Leuven Gent Management School.
    14. Richard E. Caves, 1998. "Industrial Organization and New Findings on the Turnover and Mobility of Firms," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 1947-1982, December.
    15. Bates, Timothy, 1990. "Entrepreneur Human Capital Inputs and Small Business Longevity," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 551-559, November.
    16. Philip McCann & Daniel Shefer, 2004. "Location, agglomeration and infrastructure," Advances in Spatial Science, in: Raymond J. G. M. Florax & David A. Plane (ed.), Fifty Years of Regional Science, pages 177-196, Springer.
    17. Saras D. Sarasvathy, 2004. "Making It Happen: Beyond Theories of the Firm to Theories of Firm Design," Entrepreneurship Theory and Practice, , vol. 28(6), pages 519-531, November.
    18. Thomas Dunn & Douglas Holtz-Eakin, 1996. "Financial Capital, Human Capital, and the Transition to Self-Employment:Evidence from Intergenerational Links," NBER Working Papers 5622, National Bureau of Economic Research, Inc.
    19. Acs,Zoltan J. & Audretsch,David B. (ed.), 1993. "Small Firms and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521431156.
    20. Rietveld, Piet, 1994. "Spatial economic impacts of transport infrastructure supply," Transportation Research Part A: Policy and Practice, Elsevier, vol. 28(4), pages 329-341, July.
    21. Ian R. Gordon & Philip McCann, 2005. "Innovation, agglomeration, and regional development," Journal of Economic Geography, Oxford University Press, vol. 5(5), pages 523-543, October.
    22. Bjuggren, Per-Olof & Sund, Lars-Goran, 2002. "A Transaction Cost Rationale for Transition of the Firm within the Family," Small Business Economics, Springer, vol. 19(2), pages 123-133, September.
    23. Newman, Robert J. & Sullivan, Dennis H., 1988. "Econometric analysis of business tax impacts on industrial location: What do we know, and how do we know it?," Journal of Urban Economics, Elsevier, vol. 23(2), pages 215-234, March.
    24. Taylor, Mark P, 1999. "Survival of the Fittest? An Analysis of Self-Employment Duration in Britain," Economic Journal, Royal Economic Society, vol. 109(454), pages 140-155, March.
    25. C. Mirjam van Praag, 2003. "Business Survival and Success of Young Small Business Owners," Tinbergen Institute Discussion Papers 03-050/3, Tinbergen Institute.
    26. Michael Wasylenko, 1997. "Taxation and economic development: the state of the economic literature," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 37-52.
    27. Mike Burkart & Fausto Panunzi & Andrei Shleifer, 2003. "Family Firms," Journal of Finance, American Finance Association, vol. 58(5), pages 2167-2202, October.
    28. Morten Bennedsen & Kasper M. Nielsen & Francisco Pérez-González & Daniel Wolfenzon, 2006. "Inside the Family Firm: The Role of Families in Succession Decisions and Performance," NBER Working Papers 12356, National Bureau of Economic Research, Inc.
    29. Pramodita Sharma & James J. Chrisman & Amy L. Pablo & Jess H. Chua, 2001. "Determinants of Initial Satisfaction with the Succession Process in Family Firms: A Conceptual Model," Entrepreneurship Theory and Practice, , vol. 25(3), pages 17-36, April.
    30. Paul Gompers & Josh Lerner & David Scharfstein, 2005. "Entrepreneurial Spawning: Public Corporations and the Genesis of New Ventures, 1986 to 1999," Journal of Finance, American Finance Association, vol. 60(2), pages 577-614, April.
    31. Morin, Roger A & Fernandez Suarez, Antonio, 1983. "Risk Aversion Revisited," Journal of Finance, American Finance Association, vol. 38(4), pages 1201-1216, September.
    32. Margarita Tsoutsoura, 2015. "The Effect of Succession Taxes on Family Firm Investment: Evidence from a Natural Experiment," Journal of Finance, American Finance Association, vol. 70(2), pages 649-688, April.
    33. Buttner, E. Holly & Rosen, Benson, 1989. "Funding new business ventures: Are decision makers biased against women entrepreneurs?," Journal of Business Venturing, Elsevier, vol. 4(4), pages 249-261, July.
    34. Alfred Thwaites & Pooran Wynarczyk, 1996. "The Economic Performance of Innovative Small Firms in the South East Region and Elsewhere in the UK," Regional Studies, Taylor & Francis Journals, vol. 30(2), pages 135-149.
    35. Elizabeth Garnsey & Paul Heffernan, 2005. "High-technology clustering through spin-out and attraction: The Cambridge case," Regional Studies, Taylor & Francis Journals, vol. 39(8), pages 1127-1144.
    36. Wendy C. Handler, 1990. "Succession in Family Firms: A Mutual Role Adjustment between Entrepreneur and Next-generation Family Members," Entrepreneurship Theory and Practice, , vol. 15(1), pages 37-52, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mattias Nordqvist & Karl Wennberg & Massimo Bau’ & Karin Hellerstedt, 2013. "An entrepreneurial process perspective on succession in family firms," Small Business Economics, Springer, vol. 40(4), pages 1087-1122, May.
    2. Xi, Guoqian & Block, Jörn & Lasch, Frank & Robert, Frank & Thurik, Roy, 2017. "How Does Firm Survival Differ between Business Takeovers and New Venture Start-ups?," IZA Discussion Papers 11155, Institute of Labor Economics (IZA).
    3. Cho, In Soo & Orazem, Peter, 2011. "Risk Aversion or Risk Management?: How Measures of Risk Aversion Affect Firm Entry and Firm Survival," Staff General Research Papers Archive 34162, Iowa State University, Department of Economics.
    4. Wennberg, Karl & Wiklund, Johan & DeTienne, Dawn R. & Cardon, Melissa S., 2010. "Reconceptualizing entrepreneurial exit: Divergent exit routes and their drivers," Journal of Business Venturing, Elsevier, vol. 25(4), pages 361-375, July.
    5. Masatoshi Kato & Yuji Honjo, 2015. "Entrepreneurial human capital and the survival of new firms in high- and low-tech sectors," Journal of Evolutionary Economics, Springer, vol. 25(5), pages 925-957, November.
    6. Erik Stam & Roy Thurik & Peter van der Zwan, 2010. "Entrepreneurial exit in real and imagined markets," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(4), pages 1109-1139, August.
    7. Justo, Rachida & DeTienne, Dawn R. & Sieger, Philipp, 2015. "Failure or voluntary exit? Reassessing the female underperformance hypothesis," Journal of Business Venturing, Elsevier, vol. 30(6), pages 775-792.
    8. Montgomery, Mark & Johnson, Terry & Faisal, Syed, 2005. "What kind of capital do you need to start a business: financial or human?," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(1), pages 103-122, February.
    9. Harada, Nobuyuki, 2003. "Who succeeds as an entrepreneur? An analysis of the post-entry performance of new firms in Japan," Japan and the World Economy, Elsevier, vol. 15(2), pages 211-222, April.
    10. Jonas Debrulle, 2016. "The Role of Entrepreneurship in the Context of Career Trajectories: Moving Back into Wage Employment or into Unemployment?," LABOUR, CEIS, vol. 30(2), pages 180-197, June.
    11. Ashok Mishra & Hisham El-Osta, 2008. "Effect of agricultural policy on succession decisions of farm households," Review of Economics of the Household, Springer, vol. 6(3), pages 285-307, September.
    12. José María Millán & Emilio Congregado & Concepción Román, 2010. "Determinants of Self-Employment Dynamics and their Implications on Entrepreneurial Policy Effectiveness," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 72, pages 45-76.
    13. Marco Vivarelli, 2013. "Is entrepreneurship necessarily good? Microeconomic evidence from developed and developing countries," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(6), pages 1453-1495, December.
    14. Jose Plehn-Dujowich, 2010. "A theory of serial entrepreneurship," Small Business Economics, Springer, vol. 35(4), pages 377-398, November.
    15. Enrico Santarelli & Marco Vivarelli, 2007. "Entrepreneurship and the process of firms’ entry, survival and growth," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 16(3), pages 455-488, June.
    16. XU Peng, 2021. "Population Aging and Small Business Exits," Discussion papers 21091, Research Institute of Economy, Trade and Industry (RIETI).
    17. Enrico Santarelli & Francesca Lotti, 2005. "The Survival of Family Firms: The Importance of Control and Family Ties," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 12(2), pages 183-192.
    18. Dawn DeTienne & Melissa Cardon, 2012. "Impact of founder experience on exit intentions," Small Business Economics, Springer, vol. 38(4), pages 351-374, May.
    19. Marco Vivarelli, 2012. "Entrepreneurship and Post-Entry Performance: the Microeconomic Evidence," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1286, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    20. Vivarelli, Marco, 2012. "Drivers of entrepreneurship and post-entry performance : microeconomic evidence from advanced and developing countries," Policy Research Working Paper Series 6245, The World Bank.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa10p1094. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gunther Maier (email available below). General contact details of provider: http://www.ersa.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.