[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ems/eureri/21239.html
   My bibliography  Save this paper

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

Author

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

Suggested Citation

  • Block, J.H. & Thurik, A.R. & van der Zwan, P.W. & Walter, S., 2010. "Business Takeover or New Venture? Individual and Environmental Determinants from a Cross-Country Study," ERIM Report Series Research in Management ERS-2010-042-ORG, 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.
    • Handle: RePEc:ems:eureri:21239
    as

    Download full text from publisher

    File URL: https://repub.eur.nl/pub/21239/ERS-2010-042-ORG.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David B. Audretsch & Isabel Grilo & A. Roy Thurik (ed.), 2007. "Handbook of Research on Entrepreneurship Policy," Books, Edward Elgar Publishing, number 3856.
    2. Niels Bosma & Mirjam van Praag & Roy Thurik & Gerrit de Wit, 2004. "The Value of Human and Social Capital Investments for the Business Performance of Startups," Small Business Economics, Springer, vol. 23(3), pages 227-236, October.
    3. Harry P Bowen & Dirk De Clercq, 2008. "Institutional context and the allocation of entrepreneurial effort," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(4), pages 768-768, June.
    4. Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2002. "The Regulation of Entry," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(1), pages 1-37.
    5. Isabel Grilo & Jesus-Maria Irigoyen, 2006. "Entrepreneurship in the EU: To Wish and not to be," Small Business Economics, Springer, vol. 26(4), pages 305-318, May.
    6. John Armour & Douglas Cumming, 2008. "Bankruptcy Law and Entrepreneurship," American Law and Economics Review, American Law and Economics Association, vol. 10(2), pages 303-350.
    7. Caliendo, Marco & Fossen, Frank & Kritikos, Alexander, 2010. "The impact of risk attitudes on entrepreneurial survival," Journal of Economic Behavior & Organization, Elsevier, vol. 76(1), pages 45-63, October.
    8. Simon C. Parker & Martin T. Robson, 2004. "Explaining International Variations in Self-Employment: Evidence from a Panel of OECD Countries," Southern Economic Journal, John Wiley & Sons, vol. 71(2), pages 287-301, October.
    9. Timothy B. Folta & Frédéric Delmar & Karl Wennberg, 2010. "Hybrid Entrepreneurship," Management Science, INFORMS, vol. 56(2), pages 253-269, February.
    10. von Graevenitz, Georg & Harhoff, Dietmar & Weber, Richard, 2010. "The effects of entrepreneurship education," Journal of Economic Behavior & Organization, Elsevier, vol. 76(1), pages 90-112, October.
    11. Werner Bönte & Oliver Falck & Stephan Heblich, 2009. "The Impact of Regional Age Structure on Entrepreneurship," Economic Geography, Clark University, vol. 85(3), pages 269-287, July.
    12. Bonin, Holger & Dohmen, Thomas & Falk, Armin & Huffman, David & Sunde, Uwe, 2007. "Cross-sectional earnings risk and occupational sorting: The role of risk attitudes," Labour Economics, Elsevier, vol. 14(6), pages 926-937, December.
    13. Isabel Grilo & Roy Thurik, 2008. "Determinants of entrepreneurial engagement levels in Europe and the US," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 17(6), pages 1113-1145, December.
    14. Sander Wennekers & Roy Thurik & André Stel & Niels Noorderhaven, 2010. "Uncertainty Avoidance and the Rate of Business Ownership Across 21 OECD Countries, 1976–2004," Springer Books, in: Andreas Freytag & Roy Thurik (ed.), Entrepreneurship and Culture, chapter 0, pages 271-299, Springer.
    15. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-535, June.
    16. Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
    17. Arnold C. Cooper & William C. Dunkelberg, 1986. "Entrepreneurship and paths to business ownership," Strategic Management Journal, Wiley Blackwell, vol. 7(1), pages 53-68, January.
    18. Lorraine Uhlaner & Roy Thurik, 2010. "Postmaterialism Influencing Total Entrepreneurial Activity Across Nations," Springer Books, in: Andreas Freytag & Roy Thurik (ed.), Entrepreneurship and Culture, chapter 0, pages 301-328, Springer.
    19. Grace Li Ann Yong & Kong Weng Ho, 2006. "Innovation, Imitation And Entrepreneurship," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 51(02), pages 147-173.
    20. André Stel & David Storey & A. Thurik, 2007. "The Effect of Business Regulations on Nascent and Young Business Entrepreneurship," Small Business Economics, Springer, vol. 28(2), pages 171-186, March.
    21. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December.
    22. Hausman, Jerry & McFadden, Daniel, 1984. "Specification Tests for the Multinomial Logit Model," Econometrica, Econometric Society, vol. 52(5), pages 1219-1240, September.
    23. Sander Wennekers & Andre van Stel & Niels Noorderhaven & Roy Thurik, 2004. "The Role Of Dissatisfaction And Per Capita Income In Explaining Self-Employment Across 15 European Countries," Papers on Entrepreneurship, Growth and Public Policy 2004-11, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    24. Jeng, Leslie A. & Wells, Philippe C., 2000. "The determinants of venture capital funding: evidence across countries," Journal of Corporate Finance, Elsevier, vol. 6(3), pages 241-289, September.
    25. DeTienne, Dawn R., 2010. "Entrepreneurial exit as a critical component of the entrepreneurial process: Theoretical development," Journal of Business Venturing, Elsevier, vol. 25(2), pages 203-215, March.
    26. John Armour & Douglas Cumming, 2006. "The legislative road to Silicon Valley," Oxford Economic Papers, Oxford University Press, vol. 58(4), pages 596-635, October.
    27. Erik Stam & Roy Thurik & Peter van der Zwan, 2010. "Entrepreneurial exit in real and imagined markets," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(4), pages 1109-1139, August.
    28. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521728355, March.
    29. Daron Acemoglu & Philippe Aghion & Fabrizio Zilibotti, 2006. "Distance to Frontier, Selection, and Economic Growth," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 37-74, March.
    30. Shane, Scott, 1993. "Cultural influences on national rates of innovation," Journal of Business Venturing, Elsevier, vol. 8(1), pages 59-73, January.
    31. Joan-Lluis Capelleras & Kevin F Mole & Francis J Greene & David J Storey, 2008. "Do more heavily regulated economies have poorer performing new ventures? Evidence from Britain and Spain," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(4), pages 688-704, June.
    32. Thomas M Begley & Wee-Liang Tan, 2001. "The Socio-Cultural Environment for Entrepreneurship: A Comparison Between East Asian and Anglo-Saxon Countries," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(3), pages 537-553, September.
    33. Dennis, William Jr., 1997. "More than you think: An inclusive estimate of business entries," Journal of Business Venturing, Elsevier, vol. 12(3), pages 175-196, May.
    34. Jonathan Levie & Erkko Autio, 2011. "Regulatory Burden, Rule of Law, and Entry of Strategic Entrepreneurs: An International Panel Study," Journal of Management Studies, Wiley Blackwell, vol. 48, pages 1392-1419, September.
    35. Sjoerd Beugelsdijk, 2010. "Entrepreneurial Culture, Regional Innovativeness and Economic Growth," Springer Books, in: Andreas Freytag & Roy Thurik (ed.), Entrepreneurship and Culture, chapter 0, pages 129-154, Springer.
    36. C. Mirjam Van Praag & Hans Van Ophem, 1995. "Determinants of Willingness and Opportunity to Start as an Entrepreneur," Kyklos, Wiley Blackwell, vol. 48(4), pages 513-540, November.
    37. Ray, Dennis M., 1994. "The role of risk-taking in Singapore," Journal of Business Venturing, Elsevier, vol. 9(2), pages 157-177, March.
    38. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
    39. Scott Shane, 2000. "Prior Knowledge and the Discovery of Entrepreneurial Opportunities," Organization Science, INFORMS, vol. 11(4), pages 448-469, August.
    40. Niels Noorderhaven & Roy Thurik & Sander Wennekers & André van Stel, 2004. "The Role of Dissatisfaction and per Capita Income in Explaining Self–Employment across 15 European Countries," Entrepreneurship Theory and Practice, , vol. 28(5), pages 447-466, September.
    41. Nicoletti, Giuseppe & Pryor, Frederic L., 2006. "Subjective and objective measures of governmental regulations in OECD nations," Journal of Economic Behavior & Organization, Elsevier, vol. 59(3), pages 433-449, March.
    42. Amit, Raphael & Brander, James & Zott, Christoph, 1998. "Why do venture capital firms exist? theory and canadian evidence," Journal of Business Venturing, Elsevier, vol. 13(6), pages 441-466, November.
    43. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521899604, March.
    44. Wennberg, Karl & Wiklund, Johan & DeTienne, Dawn R. & Cardon, Melissa S., 2010. "Reconceptualizing entrepreneurial exit: Divergent exit routes and their drivers," Journal of Business Venturing, Elsevier, vol. 25(4), pages 361-375, July.
    45. Block, Joern & Sandner, Philipp & Spiegel, Frank, 2009. "Do risk attitudes differ within the group of entrepreneurs?," MPRA Paper 17587, University Library of Munich, Germany.
    46. Ute Stephan & Lorraine M Uhlaner, 2010. "Performance-based vs socially supportive culture: A cross-national study of descriptive norms and entrepreneurship," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(8), pages 1347-1364, October.
    47. Benz, Matthias & Frey, Bruno S., 2008. "The value of doing what you like: Evidence from the self-employed in 23 countries," Journal of Economic Behavior & Organization, Elsevier, vol. 68(3-4), pages 445-455, December.
    48. Antoniou, Antonios & Guney, Yilmaz & Paudyal, Krishna, 2008. "The Determinants of Capital Structure: Capital Market-Oriented versus Bank-Oriented Institutions," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 43(1), pages 59-92, March.
    49. Philipp Koellinger, 2008. "Why are some entrepreneurs more innovative than others?," Small Business Economics, Springer, vol. 31(1), pages 21-37, June.
    50. Ayyagari, Meghana & Beck, Thorsten & Demirguc-Kunt, Asl, 2003. "Small and medium enterprises across the globe : a new database," Policy Research Working Paper Series 3127, The World Bank.
    51. Miller, Danny & Steier, Lloyd & Le Breton-Miller, Isabelle, 2003. "Lost in time: intergenerational succession, change, and failure in family business," Journal of Business Venturing, Elsevier, vol. 18(4), pages 513-531, July.
    52. Cliff, Jennifer E. & Jennings, P. Devereaux & Greenwood, Royston, 2006. "New to the game and questioning the rules: The experiences and beliefs of founders who start imitative versus innovative firms," Journal of Business Venturing, Elsevier, vol. 21(5), pages 633-663, September.
    53. repec:bla:kyklos:v:48:y:1995:i:4:p:513-40 is not listed on IDEAS
    54. Morten Bennedsen & Kasper Meisner Nielsen & Francisco Perez-Gonzalez & Daniel Wolfenzon, 2007. "Inside the Family Firm: The Role of Families in Succession Decisions and Performance," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(2), pages 647-691.
    55. Furman, Jeffrey L. & Porter, Michael E. & Stern, Scott, 2002. "The determinants of national innovative capacity," Research Policy, Elsevier, vol. 31(6), pages 899-933, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. S. Geindre & B. Deschamps, 2011. "les risques du processus repreneurial en PME," Post-Print halshs-00646170, HAL.
    2. Joern Block & Roy Thurik & Haibo Zhou, 2013. "What turns knowledge into innovative products? The role of entrepreneurship and knowledge spillovers," Journal of Evolutionary Economics, Springer, vol. 23(4), pages 693-718, September.
    3. Bastié Françoise & Cieply Sylvie & Cussy Pascal, 2011. "The Survival of New Firms: Do Bank Loans at Birth Matter?," Economics Working Paper Archive (University of Rennes & University of Caen) 201110, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    4. Françoise Bastié & Sylvie Cieply & Pascal Cussy, 2013. "The entrepreneur’s mode of entry: the effect of social and financial capital," Small Business Economics, Springer, vol. 40(4), pages 865-877, May.
    5. Vera Rocha & Anabela Carneiro & Celeste Amorim Varum, 2013. "Entrepreneurship Dynamics: Entry Routes, Business-Owner's Persistence and Exit Modes," CEF.UP Working Papers 1310, Universidade do Porto, Faculdade de Economia do Porto.
    6. Canton, E.J.F. & Grilo, I. & Monteagudo, J. & van der Zwan, P.W., 2012. "Perceived credit constraints in the European Union," ERIM Report Series Research in Management ERS-2010-001-ORG, 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.
    7. James Foreman-Peck & Tom Nicholls, 2013. "SME takeovers as a contributor to regional productivity gaps," Small Business Economics, Springer, vol. 41(2), pages 359-378, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Joern Block & Roy Thurik & Peter van der Zwan & Sascha Walter, 2013. "Business Takeover or New Venture? Individual and Environmental Determinants from a Cross–Country Study," Entrepreneurship Theory and Practice, , vol. 37(5), pages 1099-1121, September.
    2. Peter van der Zwan & Ingrid Verheul & Roy Thurik & Isabel Grilo, 2009. "Entrepreneurial Progress: Climbing the Entrepreneurial Ladder in Europe and the US," Tinbergen Institute Discussion Papers 09-070/3, Tinbergen Institute, revised 17 Mar 2010.
    3. Roy Thurik & Marcus Dejardin, 2012. "Entrepreneurship and Culture," Post-Print halshs-00943684, HAL.
    4. Saul Estrin & Tomasz Mickiewicz & Anna Rebmann, 2017. "Prospect theory and the effects of bankruptcy laws on entrepreneurial aspirations," Small Business Economics, Springer, vol. 48(4), pages 977-997, April.
    5. Kleinhempel, Johannes & Klasing, Mariko & Beugelsdijk, Sjoerd, 2022. "Cultural Roots of Entrepreneurship," MPRA Paper 115942, University Library of Munich, Germany.
    6. Ivano Dileo & Thaís García Pereiro, 2019. "Assessing the impact of individual and context factors on the entrepreneurial process. A cross-country multilevel approach," International Entrepreneurship and Management Journal, Springer, vol. 15(4), pages 1393-1441, December.
    7. Thai, Mai Thi Thanh & Turkina, Ekaterina, 2014. "Macro-level determinants of formal entrepreneurship versus informal entrepreneurship," Journal of Business Venturing, Elsevier, vol. 29(4), pages 490-510.
    8. Sander Wennekers & Roy Thurik & André Stel & Niels Noorderhaven, 2010. "Uncertainty Avoidance and the Rate of Business Ownership Across 21 OECD Countries, 1976–2004," Springer Books, in: Andreas Freytag & Roy Thurik (ed.), Entrepreneurship and Culture, chapter 0, pages 271-299, Springer.
    9. Jolanda Hessels & Marco Gelderen & Roy Thurik, 2008. "Entrepreneurial aspirations, motivations, and their drivers," Small Business Economics, Springer, vol. 31(3), pages 323-339, October.
    10. David Urbano & Sebastian Aparicio & Victor Querol, 2016. "Social progress orientation and innovative entrepreneurship: an international analysis," Journal of Evolutionary Economics, Springer, vol. 26(5), pages 1033-1066, December.
    11. Stephan F. Gohmann, 2012. "Institutions, Latent Entrepreneurship, and Self–Employment: An International Comparison," Entrepreneurship Theory and Practice, , vol. 36(2), pages 295-321, March.
    12. José António Porfírio & Tiago Carrilho Mendes & J. Augusto Felício, 2018. "From entrepreneurship potential in culture and creative industries to economic development: the situation of UK and southern European countries," International Entrepreneurship and Management Journal, Springer, vol. 14(2), pages 329-343, June.
    13. Francisco Liñán & José Fernandez-Serrano, 2014. "National culture, entrepreneurship and economic development: different patterns across the European Union," Small Business Economics, Springer, vol. 42(4), pages 685-701, April.
    14. Roy Thurik, 2014. "Entrepreneurship and the business cycle," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-90, October.
    15. Pekka Stenholm & Zoltán J. Ács & Robert Wuebker, 2015. "Exploring country-level institutional arrangements on the rate and type of entrepreneurial activity," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 20, pages 387-404, Edward Elgar Publishing.
    16. Jolanda Hessels & Isabel Grilo & Roy Thurik & Peter Zwan, 2011. "Entrepreneurial exit and entrepreneurial engagement," Journal of Evolutionary Economics, Springer, vol. 21(3), pages 447-471, August.
    17. Pourya Darnihamedani & Joern Hendrich Block & Jolanda Hessels & Aram Simonyan, 2015. "Start-up Costs, Taxes and Innovative Entrepreneurship," Tinbergen Institute Discussion Papers 15-013/VII, Tinbergen Institute.
    18. Miao, Chao & Gast, Johanna & Laouiti, Rahma & Nakara, Walid, 2022. "Institutional factors, religiosity, and entrepreneurial activity: A quantitative examination across 85 countries," World Development, Elsevier, vol. 149(C).
    19. Joern H. Block & Lennart Hoogerheide & Roy Thurik, 2009. "Education and Entrepreneurial Choice: An Instrumental Variables Analysis," Tinbergen Institute Discussion Papers 09-088/4, Tinbergen Institute, revised 23 Nov 2010.
    20. Román, Concepción & Congregado, Emilio & Millán, José María, 2013. "Start-up incentives: Entrepreneurship policy or active labour market programme?," Journal of Business Venturing, Elsevier, vol. 28(1), pages 151-175.

    More about this item

    Keywords

    business takeover; entrepreneurship; entry mode; multi-level analysis; new venture start; occupational choice;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ems:eureri:21239. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: RePub (email available below). General contact details of provider: https://edirc.repec.org/data/erimanl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.