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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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    Keywords

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

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