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

27 Pages Posted: 8 Nov 2010

See all articles by Jorn H. Block

Jorn H. Block

University of Trier - Faculty of Management; Erasmus University Rotterdam (EUR) - Institute of Management (ERIM)

Roy Thurik

Montpellier Business School; Erasmus University Rotterdam (EUR) - Centre for Advanced Small Business Economics (CASBEC); Erasmus Research Institute of Management (ERIM); EIM Netherlands - Business and Policy Research; Tinbergen Institute

Peter van der Zwan

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Sascha G. Walter

Lancaster University - Management School

Date Written: November 2, 2010

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: entrepreneurship, occupational choice, business takeover, entry mode, new venture start, multi-level analysis

JEL Classification: M, M13, L26, D01, L20, O32

Suggested Citation

Block, Jorn Hendrich and Thurik, Roy and van der Zwan, Peter and Walter, Sascha G., Business Takeover or New Venture? Individual and Environmental Determinants from a Cross-Country Study (November 2, 2010). ERIM Report Series Reference No. ERS-2010-042-ORG, Available at SSRN: https://ssrn.com/abstract=1703303

Jorn Hendrich Block (Contact Author)

University of Trier - Faculty of Management ( email )

D-54296
Germany

Erasmus University Rotterdam (EUR) - Institute of Management (ERIM) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Roy Thurik

Montpellier Business School

France

Erasmus University Rotterdam (EUR) - Centre for Advanced Small Business Economics (CASBEC) ( email )

3000 DR Rotterdam
Netherlands
+31 10 408 2232 (Phone)
+31 10 408 9146 (Fax)

HOME PAGE: http://www.thurik.com

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

EIM Netherlands - Business and Policy Research

Postbus 7001
2701 AA Zoetermeer
Netherlands
+31 79 341 3634 (Phone)
+31 79 331 3742 (Fax)

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Peter Van der Zwan

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Sascha G. Walter

Lancaster University - Management School ( email )

Bailrigg
Lancaster, LA1 4YX
United Kingdom

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