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  • PETER VAN DER ZWAN

    The Entrepreneurial Process An International Analysis of Entry and Exit

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    ERIM PhD Series Research in Management

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    l)THE ENTREPRENEURIAL PROCESS AN INTERNATIONAL ANALYSIS OF ENTRY AND EXIT

    This thesis deals with the entrepreneurial process from an international perspective. The first part explores which people decide to enter entrepreneurship. A distinction is made between two modes of entrepreneurial entry: taking over an existing firm and starting a new firm. The second part focuses on the exit side and examines the determinants of exit before and after business start-up. In addition, the decision to re-enter entrepreneurship after having experienced an entrepreneurial exit is analyzed in this second part.

    This thesis is of particular interest to policymakers, partly due to its dynamic approach. That is, this thesis distinguishes between several stages that make up the decision to become an entrepreneur. The stages range from no entrepreneurial activity to intentional, nascent, young, and established entrepreneurship (the “entrepreneurial ladder”). The conclusions of this thesis may help governments to intervene at positions on the entre preneurial ladder where certain characteristics, such as perceptions of the entrepreneurial environment, hinder entrepreneurial progress or where regions lag behind.

    We find that people with pessimistic views about the administrative start-up environment are discouraged in having intentions or undertaking attempts to set up their own businesses (particularly in Europe). Policies should be aimed at tackling inflated perceptions of administrative barriers (in case of misperceptions of the environment) or directly lowering these barriers. Exit before start-up and exit after business start-up have different deter - minants. For example, urbanization is negatively related to exit before start-up and positively related to exit after start-up. This finding points at the presence of overoptimistic entre - preneurs and strong selection mechanisms in urban areas. Furthermore, individuals tend to enter the entrepreneurial process again after having experienced an exit. This finding holds for positive as well as negative exit experiences.

    The Erasmus Research Institute of Management (ERIM) is the Research School (Onder - zoek school) in the field of management of the Erasmus University Rotterdam. The founding participants of ERIM are the Rotterdam School of Management (RSM), and the Erasmus School of Econo mics (ESE). ERIM was founded in 1999 and is officially accre dited by the Royal Netherlands Academy of Arts and Sciences (KNAW). The research under taken by ERIM is focused on the management of the firm in its environment, its intra- and interfirm relations, and its busi ness processes in their interdependent connections.

    The objective of ERIM is to carry out first rate research in manage ment, and to offer an ad vanced doctoral pro gramme in Research in Management. Within ERIM, over three hundred senior researchers and PhD candidates are active in the different research pro - grammes. From a variety of acade mic backgrounds and expertises, the ERIM commu nity is united in striving for excellence and working at the fore front of creating new business knowledge.

    Erasmus Research Institute of Management - Rotterdam School of Management (RSM) Erasmus School of Economics (ESE) Erasmus University Rotterdam (EUR) P.O. Box 1738, 3000 DR Rotterdam, The Netherlands

    Tel. +31 10 408 11 82 Fax +31 10 408 96 40 E-mail info@erim.eur.nl Internet www.erim.eur.nl

    E R

    IM

    Page 1; B&T11282_ERIM_Omslag_van der Zwan_20apr11

  • The Entrepreneurial Process: An International Analysis of Entry and Exit

  • The Entrepreneurial Process: An International Analysis of Entry and Exit

    Het ondernemerschapsproces: Een internationale analyse van toe- en uittreding

    THESIS

    to obtain the degree of Doctor from the Erasmus University Rotterdam

    by command of the rector magnificus

    Prof.dr. H.G. Schmidt

    and in accordance with the decision of the Doctorate Board.

    The public defense shall be held on Thursday May 26, 2011 at 15:30 hours

    by

    Peter Wilhelmus van der Zwan born in ’s-Gravenhage.

  • Doctoral Committee Promotors: Prof.dr. A.R. Thurik Prof.dr. P.J.F. Groenen Other members: Prof.dr. R. Paap Prof.dr. H.P.G. Pennings Prof.dr. C.M. van Praag Erasmus Research Institute of Management – ERIM The joint research institute of the Rotterdam School of Management (RSM) and the Erasmus School of Economics (ESE) at the Erasmus University Rotterdam Internet: http://www.erim.eur.nl ERIM Electronic Series Portal: http://hdl.handle.net/1765/1 ERIM PhD Series in Research in Management, 234 ERIM reference number: EPS-2011-234-ORG ISBN 978-90-5892-277-9 © 2011, Peter van der Zwan Design: B&T Ontwerp en advies, www.b-en-t.nl This publication (cover and interior) is printed by haveka.nl on recycled paper, Revive®. The ink used is produced from renewable resources and alcohol free fountain solution. Certifications for the paper and the printing production process: Recycle, EU Flower, FSC, ISO14001. More info: http://www.haveka.nl/greening. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the author.

  • Table of contents

    Preface (Voorwoord) 7 1 Introduction and conclusion 11 I Determinants of entrepreneurial entry 31 2 The entrepreneurial ladder and its determinants 33 3 The entrepreneurial ladder in transition and non-transition economies 47 4 Entrepreneurial progress: climbing the entrepreneurial ladder in Europe and the United States 61 5 Investigating the perceptions of credit constraints in the European Union 89 6 Business takeover or new venture? Individual and environmental determinants from a cross-country study 113 II Determinants of entrepreneurial exit and re-entry 135 7 Entrepreneurial exit in real and imagined markets 137 8 Entrepreneurial exit and entrepreneurial engagement 161 9 Entrepreneurial exit, ability and engagement across countries in different stages of development 181

  • Summary in Dutch (Nederlandse samenvatting) 197

    Thesis in short 205 References 207 About the author 233 ERIM Ph.D. Series 235

  • Preface (Voorwoord)

    Donderdag 1 maart 2007, 9.00 uur: het begin van mijn vierjarige avontuur op de twaalfde verdieping van het H-gebouw van de Erasmus Universiteit Rotterdam. Hoewel ik het aankomst- tijdstip van die dag (9.00 uur stipt) nimmer heb weten te evenaren gedurende mijn promotie- traject, was ik – op een enkele uitzondering na – elke dag aanwezig. Zo geef ik ook op deze zonnige woensdag acte de présence, een aantal dagen voordat ik mijn proefschrift naar de drukker zal sturen. Een mijlpaal! En tevens een uitstekend moment om mijn dankwoord uit te brengen. Flink wat mensen hebben namelijk bijgedragen aan een zeer onvergetelijke en leer- zame periode. Hieronder doe ik een poging deze lijst van individuen zo volledig mogelijk de revue te laten passeren.

    Ik zal bij het begin beginnen. Het moet eind 2005 zijn geweest dat ik een college Multiva- riate Statistiek volgde van Patrick Groenen. Daar vertelde Roy Thurik over een interessant afstudeerproject bij EIM. Mijn enthousiasme liet me ook ditmaal niet in de steek en met een volmondig ‘ja’ nam ik het aanbod aan. Dit bleek bepaald geen overhaaste beslissing, want een aantal maanden later wist ik mijn scriptie met succes te verdedigen. Mijn academische ont- dekkingsreis kreeg een passend vervolg middels een vierjarig promotietraject onder de bezielende supervisie van Roy. Ik bedank Roy voor zijn inspirerende ideeën, maar ook voor de bij tijd en wijle vermakelijke gesprekken. En gelukkig was er nog iemand die mij deadlines oplegde! Patrick Groenen ben ik ook dankbaar voor zijn rol als promotor.

    Op kamer H12-16 is er door de jaren heen flink gezwoegd. Toch was het er vaak (te) gezel- lig. Ten eerste werd dit veroorzaakt door de verzameling flessen (wijn, rosé, champagne, sake, bier en wat dies meer zij) die allengs imposanter werd. Deze verzameling vloeide voort uit meer dan veertig afstudeersessies waarbij ik als begeleider of meelezer optrad. Afstudeer- sessies mondden al snel uit tot een favoriet tijdverdrijf. De uitgelatenheid van student(e) en familie na afloop blijft erg mooi om mee te maken.

    Ten tweede mogen de ‘bewoners’ van H12-16 niet onvermeld blijven. Haibo en ik waren in de zomermaanden dikwijls de enige aanwezigen op de gehele twaalfde verdieping. Met col