Investigating the Influence of Psychological Ownership on Exit Intention and Passing-on Option of Indian Micro and Small Enterprise Owners

Abstract

Understanding business exit is important because it significantly disturbs the industry balance which in turn affects the economy. Much extant research has explored entrepreneurial exit strategies in the context of developed countries. Certainly, very less is known about the exit intention of entrepreneurs from the micro, small, and medium enterprises in developing countries. As business ecosystem in India is different from developed countries, this study aims at empirically investigating the influence of psychological ownership on exit intention and passing-on option of Indian micro and small enterprise (MSE) owners using theory of planned behaviour. This study employs a survey method and 350 MSE owners are surveyed using a self-administered questionnaire. The findings suggest that strong psychological ownership negatively influences the exit intention of Indian MSE owners and exit intention partially mediates the relationship between strong psychological ownership and passing-on option. This knowledge will be helpful for enabling conditions for succession planning.