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The entrepreneur's mode of entry: Business takeover or new venture start?

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  • Parker, Simon C.
  • van Praag, C. Mirjam

Abstract

We extend the well-known occupational choice model of entrepreneurship by analyzing the mode of entry. Individuals can become entrepreneurs by taking over established businesses or starting up new ventures from scratch. We argue that the new venture creation mode is associated with higher levels of schooling whereas managerial experience, new venture start-up capital requirements and industry level risk promote the takeover mode. A sample of data on entrepreneurs from The Netherlands provides broad support for these hypotheses, and also bears out a prediction that entrepreneurs whose parents run a family firm tend to invest the least in schooling. We go on to discuss the implications for researchers, entrepreneurs and public policy makers.

Suggested Citation

  • Parker, Simon C. & van Praag, C. Mirjam, 2012. "The entrepreneur's mode of entry: Business takeover or new venture start?," Journal of Business Venturing, Elsevier, vol. 27(1), pages 31-46.
    • Handle: RePEc:eee:jbvent:v:27:y:2012:i:1:p:31-46
    DOI: 10.1016/j.jbusvent.2010.08.002
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    1. Daniela Gimenez-Jimenez & Linda F. Edelman & Tommaso Minola & Andrea Calabrò & Lucio Cassia, 2021. "An Intergeneration Solidarity Perspective on Succession Intentions in Family Firms," Entrepreneurship Theory and Practice, , vol. 45(4), pages 740-766, July.
    2. Schlömer-Laufen, Nadine & Kay, Rosemarie, 2013. "Zum Einfluss des Geschlechts des Übergebers auf die Wahl des familieninternen Nachfolgers: Eine theoretische und empirische Analyse in deutschen Familienunternehmen," Working Papers 01/13, Institut für Mittelstandsforschung (IfM) Bonn.
    3. Brändle, Leif & Rönnert, Anna-Lena & Moergen, Kristie J.N. & Zhao, Eric Yanfei, 2025. "Social class origin and entrepreneurship: An integrative review and research agenda," Journal of Business Venturing, Elsevier, vol. 40(4).

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