Reconceptualizing Entrepreneurial Exit: Divergent Exit Routes and Their Drivers

Karl Wennberg (), Johan Wiklund (), Dawn DeTienne () and Melissa Cardon ()
Additional contact information
Johan Wiklund: Whitman School of Management, Postal: Whitman School of Management, Syracuse University, E-mail: jwiklund@syr.edu,
Dawn DeTienne: Colorado State University, Postal: 207 Rockwell Hall, Fort Collins, CO 80523, USA
Melissa Cardon: Pace University, Postal: Goldstein 227, Pleasantville NY 10570, USA

No 2009:10, SSE/EFI Working Paper Series in Business Administration from Stockholm School of Economics

Abstract: We develop a conceptual model of entrepreneurial exit which includes exit through liquidation and firm sale for both firms in financial distress and firms performing well. This represents four distinct exit routes. In developing the model, we complement the prevailing theoretical framework of exit as a utility-maximizing problem among entrepreneurs with prospect theory and its recent applications in liquidation of investment decisions. We empirically test the model using two Swedish databases which follow 1,735 new ventures and their founders over eight years. We find that entrepreneurs exit from both firms in financial distress and firms performing well. In addition, commonly examined human capital factors (entrepreneurial experience, age, education) and failure-avoidance strategies (outside job, reinvestment) differ substantially across the four exit routes, explaining some of the discrepancies in earlier studies

Keywords: Entrepreneurial Exit; Prospect Theory; Human Capital (search for similar items in EconPapers)
Pages: 41 pages
Date: 2009-02-10
New Economics Papers: this item is included in nep-bec, nep-ent and nep-hrm
Note: Forthcoming, Journal of Business Venturing
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Forthcoming in Journal of Business Venturing, 2009.

Downloads: (external link)
http://swoba.hhs.se/hastba/papers/hastba2009_010.pdf (application/pdf)

Related works:
Journal Article: Reconceptualizing entrepreneurial exit: Divergent exit routes and their drivers (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhb:hastba:2009_010

Access Statistics for this paper

More papers in SSE/EFI Working Paper Series in Business Administration from Stockholm School of Economics The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, SE 113 83 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Helena Lundin ().