Buying and Selling Entrepreneurial Assets
Sumudu Kankanamge and
Alexandre Gaillard ()
No 20-1078, TSE Working Papers from Toulouse School of Economics (TSE)
How are the options to buy and sell a business relevant for entrepreneurs? Prospective entrepreneurs value the purchase of mature firms while incumbents want to recover both the tangible and intangible value of their businesses upon exit. We introduce a theory of entrepreneurial assets transfer consistent with empirical evidence and centered around a businesses for sale market that lets entrepreneurs trade the maturity components of their firms. We find that shutting that market down leads to a substantial drop in aggregate output and alters the pool of firms, incentives to enter and exit, and the wealth distribution.
Keywords: Entrepreneurship; Business transfers; Maturity value; Intangible assets (search for similar items in EconPapers)
JEL-codes: E22 E23 D40 J24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-dge, nep-ent, nep-fdg, nep-ind, nep-mac and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:124109
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