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Business Takeover or New Venture? Individual and Environmental Determinants from a Cross-Country Study

  • Block, J.H.
  • Thurik, A.R.
  • van der Zwan, P.W.
  • Walter, S.

Whereas the determinants of entrepreneurial choice have been thoroughly analyzed in the literature, little is known about the preferred mode of entry into entrepreneurship, such as taking over an existing business or starting a new venture. Using a large international dataset, this study reports considerable differences in takeover preferences across 33 countries. Hierarchical (multi-level) regressions are performed to explore individual-level and country-level determinants of the preferred mode of entry. At the individual level, a person’s human capital, risk attitude, and inventiveness influence the preference for starting a new venture versus taking over an existing business. At the country level, the culture-inherent level of risk tolerance, the country’s level of innovation output, and the administrative difficulty of starting a new business are found to explain the between-country variation in the preferred mode of entry. Implications of our findings for research and practice are also discussed.

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Paper provided by Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam in its series ERIM Report Series Research in Management with number ERS-2010-042-ORG.

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Date of creation: 02 Nov 2010
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Handle: RePEc:ems:eureri:21239
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RSM Erasmus University & Erasmus School of Economics, PoBox 1738, 3000 DR Rotterdam

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