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

Joern Block, Roy Thurik, Peter van der Zwan and Sascha Walter

ERIM Report Series Research in Management from 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

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.

Keywords: business takeover; entrepreneurship; entry mode; multi-level analysis; new venture start; occupational choice (search for similar items in EconPapers)
JEL-codes: D01 L20 L26 M M13 O32 (search for similar items in EconPapers)
Date: 2010-11-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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