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

Authors

  • Joern Block,

    Corresponding author
    1. Erasmus School of Economics, Erasmus University Rotterdam, the Netherlands
      Roy Thurik, tel.: 0031104082776; e-mail: thurik@ese.eur.nl, to Joern Block at block@wi.tum.de, to Peter van der Zwan at vanderzwan@ese.eur.nl, and to Sascha Walter at sascha.walter@bwl.uni-kiel.de.
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  • Roy Thurik,

    Corresponding author
    1. Erasmus School of Economics, Erasmus University Rotterdam, the Netherlands
      Roy Thurik, tel.: 0031104082776; e-mail: thurik@ese.eur.nl, to Joern Block at block@wi.tum.de, to Peter van der Zwan at vanderzwan@ese.eur.nl, and to Sascha Walter at sascha.walter@bwl.uni-kiel.de.
    Search for more papers by this author
  • Peter van der Zwan,

    Corresponding author
    1. Erasmus School of Economics, Erasmus University Rotterdam, the Netherlands
      Roy Thurik, tel.: 0031104082776; e-mail: thurik@ese.eur.nl, to Joern Block at block@wi.tum.de, to Peter van der Zwan at vanderzwan@ese.eur.nl, and to Sascha Walter at sascha.walter@bwl.uni-kiel.de.
    Search for more papers by this author
  • Sascha Walter

    Corresponding author
    1. Christian-Albrechts-University Kiel, Germany
      Roy Thurik, tel.: 0031104082776; e-mail: thurik@ese.eur.nl, to Joern Block at block@wi.tum.de, to Peter van der Zwan at vanderzwan@ese.eur.nl, and to Sascha Walter at sascha.walter@bwl.uni-kiel.de.
    Search for more papers by this author

Roy Thurik, tel.: 0031104082776; e-mail: thurik@ese.eur.nl, to Joern Block at block@wi.tum.de, to Peter van der Zwan at vanderzwan@ese.eur.nl, and to Sascha Walter at sascha.walter@bwl.uni-kiel.de.

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 data set, this study reports considerable differences in takeover preferences across 33 countries. Hierarchical (multilevel) 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.

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