The entrepreneur's mode of entry: the effect of social and financial capital

Françoise Bastié (), Sylvie Cieply () and Pascal Cussy ()
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Françoise Bastié: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique
Sylvie Cieply: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique
Pascal Cussy: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique

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Abstract: This article uses a French database of firms set up in 1998 to investigate the determinants of takeovers versus startups as a mode of entry. It ficuses on two determinants that previous research has not fully analyzed: social capital and financial capital. Our findings suggest social capital affects the mode of entry. they show that entrepreneurs with social capital are more likely to create new firms from scratch than to take over existing firms. We confirm the effect of financial capital on the mode of entry. Bank loans are more often associated with takeovers than with startups and low initial wealth is more often associated with startups than with takeovers. These results show that finance affects the mode of entry.

Keywords: Entry mode; Nascent entrepreneurs; Startup; Business takeover; Financial capital (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (18)

Published in Small Business Economics, 2013, 40 (4), pp.865-877. ⟨10.1007/s11187-011-9391-y⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00658182

DOI: 10.1007/s11187-011-9391-y

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