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Start Over
The Entrepreneur's Mode of Entry: Business Takeover or New Venture Start?
- Publication Year :
- 2006
- Publisher :
- Tinbergen Institute Amsterdam and Rotterdam, 2006.
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Abstract
- We analyse the decision to become an entrepreneur by either taking over an established business or starting a new venture from scratch. A model is developed which predicts how several individual- and firm-specific characteristics influence entrepreneurs’ entry mode. The new venture creation mode is associated with higher levels of schooling and wealth, whereas managerial experience, new venture start-up capital requirements and risk promote the takeover mode. Entrepreneurs whose parents run a family firm are predicted to invest the least in schooling, since schooling reduces search costs and these individuals have the lowest probability of needing to search for a business opportunity outside their family. A sample of data on entrepreneurs from the Netherlands provides broad support for the theory; implications for policy-makers concerned about the survival of family firms lacking within-family successors are discussed.
Details
- Language :
- English
- Database :
- OpenAIRE
- Accession number :
- edsair.dedup.wf.001..07943f1491458f2b52e20e05d6a2002f