17 July 2009
EIM Business & Policy Research (EIM BV) is an independent research and consultancy organisation based in the Netherlands. EIM has been carrying out policy research on enterprise issues for 75 years in various fields such as entrepreneurship and business development, employment, ICT, innovation, internationalisation and administrative burdens.
Entrepreneurial exit and entrepreneurial engagement, an EIM study.pdf
Excerpt from study on "Entrepreneurial Exit and Entrepreneurial Engagement" below. Please download the attached document to view the full report.
Entrepreneurship or "the creation of new economic activity" (Davidsson et al. 2006, p 27) can be viewed as a process that includes several (successive) engagement levels (Grilo and Thurik 2008) such as intentions to set-up a firm and actual start-up activity. Discrimination between entrepreneurial engagement levels is important for scholars and policy makers because the drivers per engagement level are not necessarily equal. The typical question then becomes: Which people are likely to be involved in the entrepreneurial process and why do they move from one level to the next? This entrepreneurial process can also be referred to as an entrepreneurial ladder (van der Zwan et al. 2009). This paper focuses on the role of recent entrepreneurial exit in explaining (the level of) current entrepreneurial engagement.
... Using a data set of some 350,000 individuals from 24 countries we investigate the influence of earlier entrepreneurial exit on successive entrepreneurial engagement levels while controlling for individual characteristics including the country of origin.
... Our findings illustrate that a recent exit decreases the probability of undertaking no entrepreneurial activity, and that it mainly increases the probabilities of being a potential or intentional entrepreneur. We contribute to earlier findings by suggesting that exit may not only stimulate new entry, but may also positively affect entrepreneurial potential, intentions and even engagement in existing businesses. Overall, those individuals who have recently exited present an important source of entrepreneurial energy within societies. Our findings assist governments to design more effective and targeted policies with respect to the exploitation of entrepreneurial energy and encouragement of start-up activity, since this study provides insight into determinants of both entrepreneurial exit and engagement across countries. It shows that the creation of obstacles to (re-)engagement comes with a cost.