Business Exit Research Articles

Unraveling gender differences in entrepreneurial exits: The role of human capital and family situation during an unprecedented crisis

This study applies a gender role perspective to delve into disparities in entrepreneurial exit decisions during unprecedented crises such as the COVID-19 pandemic. The paper examines how human capital and family dynamics—encompassing family income and size—interact with evolving social roles and responsibilities. Using multinomial estimation techniques and Global Entrepreneurship Monitor survey data from Chile, our findings reveal that women entrepreneurs display a higher likelihood of business exits compared to their male counterparts. Further analysis with moderating variables shows that the gender coefficient is not significant and unveils a non-linear pattern tied to educational backgrounds. Specifically, women with elementary education are prone to discontinuing businesses due to the COVID-19 crisis, with a similar—though weaker—tendency observed among women with tertiary education. Women with medium education levels do not significantly differ from men in terms of business closures due to COVID-19. Additionally, family size disproportionately affects women, amplifying the likelihood of business exits during the COVID-19 crisis compared to men. The paper offers actionable insights for researchers and policymakers, emphasizing the pressing need to augment women's entrepreneurial resilience in the face of unforeseen crises.

The impact of entrepreneurs’ military experience on small business exit: A conservation of resources perspective

Based on insights drawn from the conservation of resources (COR) theory, this paper examines the impact of military experience on small business exit decisions among entrepreneurs. We theorize that entrepreneurs with military backgrounds are more conservative regarding the potential resource loss associated with the entrepreneurial process than those without military experience, making them more likely to exit their business as a coping mechanism. We further theorize that these entrepreneurs are more likely to exit the business voluntarily rather than involuntarily, using business exit as a coping mechanism to preemptively manage risks before the actual losses occur. An empirical analysis of data from the 2007 Survey of Business Owners (SBO 2007) provided by the United States Census Bureau supports our hypotheses. This study contributes to our knowledge of how military service affects entrepreneurs’ decisions regarding business exit.

‘Involuntary exit for personal reasons’ – A gendered critique of the business exit decision

Women are more likely to exit from entrepreneurship for personal reasons; such exits are deemed uneventful and voluntary. We critically evaluate such assumptions by adopting a gendered critique to unpack the nature of such personal reasons arguing that they largely relate to the stress of accommodating incompatible caring/domestic and entrepreneurial labour demands. This, we argue, leads to forced voluntarism which, for many women, instigates conflicting notions of regret, relief and resentment. To explore these arguments, we draw upon in-depth interviews with 16 United Kingdom women entrepreneurs who had voluntarily exited from their ventures citing personal reasons. The evidence describes how women made sense of the decision-making process to exit from entrepreneurship questioning the voluntary nature of the exit decision. We conclude by noting how once again, gendered assumptions conceal the contradictory demands women encounter when trying to reconcile the needs of the household and of their ventures analysing the implications this has for how exit decisions are categorised and the false picture this presents of alleged voluntarism.

Who died, who survived? COVID-19 epidemic, industrial dynamics and urban economic resilience

The COVID-19 epidemic has altered the economic geographies of cities. However, the academic focus on urban industries and their structural dynamics is far from enough. In this paper, we integrate literature from economic geography, business studies and network sciences, and design an adaptation framework to theorize urban economic resilience. Taking the COVID-19 outbreak in Xinfadi, Beijing during the summer of 2020 as a case study, we use Logit regressions and DID estimations to identify the impacts of the epidemic on local industrial dynamics. Our results support that the COVID-19 outbreak significantly increases the number of business exits. The negative impacts are concentrated in high-risk regions, pointing to specific industries and individual-owned firms. Furthermore, we use a machine learning method to visualize the dynamics of industry networks in a small-scale urban area, and then simulate the transmission paths of industry-failure. In doing so, we contribute to current economic resilience literature that firm-level adaptation and industrial dynamics complement regional adaptation theory, while the cascading effects in the industry network underpin the micro foundations of resilience formation.

Israeli tech entrepreneurship: glorification of business exits in the media

ABSTRACT Traditionally, entrepreneurs build long-term companies that generate profits by selling goods and services. Nowadays, entrepreneurs are building companies solely to sell them to larger corporations to profit from early ‘exits’ due to the glorifying media characteristic. Based on an Israeli case study, this article examines how media outlets portray the ‘exit’ catchphrase. An analysis of semi-structured interviews with Israeli tech journalists and a thematic analysis of news articles is used to identify the three main narratives appearing in the media for encouraging exits: High-tech entrepreneur (individual), company (entity), and the industry (macro point of view).

Religion and Entrepreneurial Exits: Divine Attributions and Eternal Time-frames

This conceptual study, drawing upon the literature on causal attributions and time perspectives, explores how religion may influence entrepreneurs' decisions to exit ventures. Religious beliefs and principles will likely shift entrepreneurs' (a) causal attributions of success and failure from internal or external loci to a third locus of causality, i. e., the divine, and (b) temporal depths from weeks, months, or years to eternity. Such shifts may, in turn, influence entrepreneurial exits through the nonmarket logic of religion, with contemplative practices acting as the underlying mechanism. Using the context of Jainism, a minority religion – originating in India – characterized by self-employed adherents and a seeming paradox between austerity and ostentation, this study develops propositions that relate religion to business exits.

Deer in the extreme north-east of Russia: Koryak ecotype (Rangifer Tarandus L.)

Purpose: the study of economic and significant indicators of the Koryak ecotype of the northern deer.Materials and methods. The model for the study of the Koryak ecotype was the livestock of animals in agricultural enterprises for breeding the northern deer in the Kamchatka Peninsula during the stable development of the industry, with a total number of more than 125 thousand individuals. The entire number of deer was contained in 86 herds, on average in one herd, up to 1,400-1500 animals fell. Zootechnical information was taken from annual reports of deer farms. In the study of farms, indicators used in the reindeer husbandry industry were taken: the number of deer at the beginning of the year; the uterus in the structure of the herd (the number of important and heels in % to the total number of deer); offspring - received living calves at the end of the hotel per 100 uterus, %; DWT - a business exit of calves at the end of the year per 100 uterus, %; SVP - the safety of the adult number of deer at the end of the year, %; Production of meat in live weight, taking into account growth per 100 January deer, in C; Live weight of sexual age groups, kg.Results. The reindeer husbandry of the territory was distinguished by high quality indicators. The specific gravity of the uterus in the structure of the herd was maintained at 60 % and higher. The deer of this ecotype has good reproductive properties, on average at the end of the hotel there were more than 86 calves per 100 queens. The business yield of young animals at the end of the year on average ecotip was 80.6 % with fluctuations from 73 to 86.5 %, which confirms the high reproductive properties and viability of the young deer group of the northern deer. The safety indicator of the adult livestock at the end of the year was at the level of 93.9 % with fluctuations in individual populations from 90.4 % to 96.5 %. The production of meat in live weight, taking into account the growth of 100 deer according to individual scope, was flukes from 28 to 31.5 c, with an average ecotype value over 29.2 c. In terms of live weight of the Koryak ecotype deer, they exceeded the analogues of the sexual age groups of deer in the Chukotsk AO by 1.0-7.7 %, which confirms their high household chores. When crossing the deer of the Koryak ecotype and the Chukotka breed, a manifestation of heterosis was noted, since the estates significantly exceeded both initial parental forms in live weight, the preservation of the livestock, the business exit of young animals increased, and the production of meat increased. The identification of highly productive ecotypes and the creation on their basis of in -breed structures will increase the productivity of the northern deer.

Analysis of foreign business exits from Russia

Analysis of foreign business exits from Russia

The Impact of Tax Increment Financing on Business Entries and Exits in Iowa

One of the economic development objectives of tax increment financing (TIF) is to increase business entries and decrease exits in designated areas. The authors use data on sales and use tax permit registrations in Iowa for two of the largest counties, Johnson and Polk, during the period 1990 through 2017 to estimate the effects of TIF on business establishments, entries, and exits. Using an event-study design, the analysis of pooled data suggests that TIF has no significant effect on total establishments or business entries, and significantly reduces business exits. TIF seems to increase establishments in Johnson County and to reduce business exits in Polk County. Of the industries examined, retail stands to benefit the most from TIF. The authors also find limited evidence of spatial spillover effects of TIF.

Agglomeration factors and the geography of growing early‐stage businesses in Chile

AbstractNew models of agglomeration cast the urban productivity premium as the outcome of agglomeration economies, a spatial sorting of skilled entrepreneurs and greater selection effects leading to less, but more productive businesses. We provide descriptive evidence of the spatial distribution of growing early‐stage businesses in Chile that concurs with the theory. We show, first, that while business entry rates increase systematically with the size of a region, the rates of growing early‐stage businesses are not related to the levels of agglomeration. Second, we show that, on the contrary, average early‐stage business productivity, the levels of human capital and business exit rates all relate positively with agglomeration. Third, we estimate regression models that verify the expected relationships between agglomeration factors and regional growing early‐stage‐business activity. The results for Chile suggest that the disadvantages of agglomeration largely offset the benefits, and therefore there is no obvious location penalty to venturing in peripheral areas. Entrepreneurship policies in less‐developed countries should not target excessively to specific industries and regions, as they might curtail an entrepreneurial potential that is ubiquitous.

The impact of entrepreneurs’ military experience on small business exit: Evidence from the U.S.

The impact of entrepreneurs’ military experience on small business exit: Evidence from the U.S.

Timely Business Dynamics Using Google Places

We introduce a new real-time method to measure business opening and closure rates by relying on Google Places, the data behind the Google Maps platform. We collect data on establishments of customer-facing industries (food, retail, accommodation) and provide evidence that the opening and closure rates reflect well the temporary closures and reopening during the pandemic. We find that the operational or closed status of establishments is correlated with business reviews: fewer reviews are associated with impending business exit, and more reviews are associated with expanding businesses posting new job vacancies.

Monetary Policy, Business Liquidity and Survival: Evidence from the Refinancing Channel

Abstract We study the impact of the refinancing channel of monetary policy on very small and medium-sized businesses. Using data covering the near universe of these businesses, we find that increased household refinancing reduces the probability that a business exits or exhausts its debt capacity in the calendar year, as well as 6 years after the first exposure. It also helps younger businesses maintain credit relationships. Financial factors, like business liquidity, as well as local demand dependence, amplify these effects, especially for very small businesses. These results suggest that the refinancing channel of monetary policy can have large long-run effects on local economies. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

I will survive…but at what (opportunity) cost?: A spatial analysis of business survival and Jacobian externalities

AbstractUsing insights gained from Jacobian externalities, we consider how a more diverse economic industrial base relates to business survival rates. While a low survival rate is often perceived negatively among policy‐makers, evidence suggests that business exit is part of a dynamic and robust economy. The high opportunity cost of continuing with a struggling business in a more diversified economy may ultimately sway entrepreneurs with less competitive ventures to exit leading to lower survival rates. We model average 5‐year survival rates at the county level annually from 1990 to 2012 employing a spatial panel Durbin specification. The data support the central hypothesis that more diversified economies increase the opportunity costs of operating an underperforming new business, thereby lowering survival rates.

Should I stay or should I go? The impact of entrepreneurs’ loneliness on business exit intentions through entrepreneurial passion

Loneliness is a serious source of suffering for entrepreneurs. Although the negative impact of loneliness on entrepreneurs' well-being has been studied, the mechanism through which loneliness affects entrepreneurial outcomes is less known. In this research, instead of examining the negative consequences of loneliness as related to well-being, we focus on its impact on entrepreneurs' business exit intentions. In particular, we identify entrepreneurial passion as one mediating mechanism through which entrepreneurs' loneliness influences business exit intentions. One time-lagged survey using a sample of entrepreneurs from the United Kingdom and an additional survey using a sample of Indonesian entrepreneurs show that high levels of entrepreneurs' loneliness increase their business exit intentions through reducing entrepreneurial passion. Our findings advance research on entrepreneurs' loneliness by identifying a new mechanism and extending its impact from entrepreneurs’ well-being-related outcomes to a business-related outcome.

The INFLUENCE of SELLER CARRY NOTES in TRANSACTION PRICING of SALES of CLOSELY HELD BUSINESS ORGANIZATIONS

The concept of business exit has been relatively well explored in the literature in terms of publicly traded companies. However, exit from privately held companies has received much less attention. The principal question to be examined by this research is to determine whether or not there is an increase in the transaction price of a privately held firm upon owner exit when a seller carry note is part or all of the consideration. Using a sample of privately held firm sales, we find that the existence of a seller carry note is positively related to a higher transaction price in the sale of these companies. This finding implies a spillover effect that indicates the full risk of carrying the note is not borne by the rate of interest on the note. This information is important to business exit outcomes for owners and managers of these firms as they negotiate the transaction price for their companies and to researchers attempting to increase their understanding of owner exit from privately held business organizations.

Impact of Consumer Awareness and Behavior on Business Exits in the Hospitality, Tourism, Entertainment, and Culture Industries under the COVID-19 Pandemic

Empirical studies on small business survival and exits focus on endogenous firms and top manager characteristics, whereas few studies consider exogenous demand shocks and local consumer awareness and behavior, which are especially important for local hospitality industries. Therefore, this study addresses this research gap by targeting the COVID-19 pandemic and anti-contagion policies as a local demand shock for service industries. We empirically investigate the causal effects of changing local consumer awareness and behavior under COVID-19 on business exits at the prefecture-industry level. Based on a panel fixed-effect estimation using a longitudinal dataset of 32 service industries in 47 prefectures over 10 months in Japan, we demonstrate that an increase in consumers’ risk aversion and sympathy for self-restraint from going out, and a decrease in going out with family members, significantly increase the exit ratio in specific service industries in the same prefecture. Moreover, we find that these effects vary by consumer type depending on factors such as gender, age, income level, and household structure.

Extending the Theory of Planned Behavior – A Longitudinal Study of Entrepreneurial Intentions

Abstract Most recent research about entrepreneurial intent (EI) examines EI and its determinants as a one-time event, but whether and how EI is continuously changing during early-stage entrepreneurship has not been adequately addressed. We track the shifts in the EI of young creative sector early-stage entrepreneurs vis-à-vis their changing external circumstances and their developing perceptions of the realities of business start-up. Our findings of 11 established and 10 new determinants of EI contribute to the Theory of Planned Behavior (TPB), and guide our appreciation of EI as a dynamic, longitudinal construct, which is the link between intent and realized action. Our findings have profound implications for policy-makers and practitioners, for instance those wishing to help early-stage entrepreneurs to establish businesses when they only possess limited entrepreneurial experience. This research study, therefore, responds to calls for more longitudinal qualitative research into the determinants of EI, entrepreneurial processes, and early business exit.

Examining the success of women of color-owned small and medium-sized enterprises in the United States: A system dynamics perspective

The objective of this study was to unravel the challenges confronting women of color (WoC)-owned small and medium-sized enterprises (SMEs) in the United States. This is based on findings that most WoC-owned SMEs fail within the first few years of establishment. The impact of the global financial crisis resulting from the COVID-19 pandemic on WoC-owned SMEs was also explored. System Dynamics (SD) is a computational modeling approach useful for understanding changes in a system over time and is applied in this study to illustrate WoC entrepreneurs' navigation through the startup and maturation of SMEs. The authors calibrated and validated the model with publicly available data. Findings revealed that more emphasis should be placed on failure reduction in the early years of establishment of these businesses. Also, there is the need for early intervention rather than focusing on the improvement of the successful business exit from the system. Results indicated that the creation of new businesses by WoC after the failure of existing businesses produced an increase in the number of failed enterprises. The authors assert that attention must be paid at the individual level through support to the entrepreneur. This study contributes to the extant literature by providing the first known SD model useful in depicting the SME system for WoC entrepreneurs in the US. The model serves as a potentially useful tool for informing effective policy making, education, and programmatic approaches to support the success of WoC entrepreneurs in the US.

Aging Small Business Owner-managers and Business Exit: Longitudinal Investigation

The context of this study is business exit decisions of aging small business owner-managers. Because of the intention-action gap that exists between the theoretical modeling and actual behavior, and the existence of multiple important goals (e.g. business exit, retirement), we do not fully grasp the social psychological mechanism underlying actual business exit among aging small business owner-managers. In our theorizing efforts, we argue that aging small business owner-managers' perceived control over a target behaviour (i.e. business exit), combined with higher levels of general self-efficacy, is likely to facilitate business exit intention turning into actual business exit. We collected empirical, longitudinal data among aging Finnish small business owner-managers to test a mediated moderated model. Our main empirical findings suggests that attitude-behavioural models (e.g. Theory of Planned behavior) can help us gain a deeper understanding of how intentions translate into actual behavior in situations with multiple important goals if they are coupled with more generic control beliefs, such as self-efficacy. This main finding has both theoretical and practical implications.