The entrepreneur's mode of entry: business takeover or new venture start?

Simon Parker, Mirjam van Praag

Research output: Contribution to journalArticle

55 Citations (Scopus)

Abstract

We extend the well-known occupational choice model of entrepreneurship by analyzing the mode of entry. Individuals can become entrepreneurs by taking over established businesses or starting up new ventures from scratch. We argue that the new venture creation mode is associated with higher levels of schooling whereas managerial experience, new venture start-up capital requirements and industry level risk promote the takeover mode. A sample of data on entrepreneurs from The Netherlands provides broad support for these hypotheses, and also bears out a prediction that entrepreneurs whose parents run a family firm tend to invest the least in schooling. We go on to discuss the implications for researchers, entrepreneurs and public policy makers.

Original languageEnglish
Pages (from-to)31-46
Number of pages16
JournalJournal of Business Venturing
Volume27
Issue number1
Early online date18 Oct 2010
DOIs
Publication statusPublished - Jan 2012

Keywords

  • business start-up
  • business takeover
  • entrepreneur
  • education
  • human capital

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