Chapter 18: Exit
Karl Wennberg* Much research has been devoted to look for characteristics that drive individuals towards engaging in entrepreneurship. Less attention has been given to the question of what makes people persist in or exit from entrepreneurship. However, recent years have seen an increasing focus on entrepreneurial exit in a number of specialized workshops and conferences, new research projects, and special issues in international journals. This chapter provides a stocktake on past exits, outlining the progress that research has made, together with some key problems in defining and investigating entrepreneurial exit. Conceptually, the chapter focuses on the level of analysis and different definitions of exit. Empirically, the chapter describes the streams of research suggesting that exit is either determined by the environment or the entrepreneur, together with a stream of research that emphasizes the connection between entry and exit as path-dependent processes. The chapter concludes by highlighting a number of unsolved issues and interesting pathways for future research on entrepreneurial exit. Entrepreneurial exit is a multifaceted and multi-level phenomenon. It concerns both exit of entrepreneurial firms from the marketplace and exit of self-employed individuals from their entrepreneurial activities on the labor market. Empirical studies of these topics hold that entrepreneurs and new firms will be less likely to exit as they persist over time. Yet, few of these studies acknowledge that exit is multifaceted in that there are different types of entrepreneurial exit, such as liquidation, bankruptcy or sell-off of a firm. For example, closure rates are likely to be lower...
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