The entrepreneur's mode of entry: business takeover or new venture start
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.
Year of publication: |
2006
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Authors: | Parker, Simon C. ; van Praag, C. Mirjam |
Publisher: |
Bonn : Institute for the Study of Labor (IZA) |
Saved in:
freely available
Series: | IZA Discussion Papers ; 2382 |
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Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Working Paper |
Language: | English |
Other identifiers: | 519643143 [GVK] hdl:10419/34005 [Handle] |
Source: |
Persistent link: https://www.econbiz.de/10010276149
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