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- Title
Entrepreneurial exit intentions in emerging economies: a neoinstitutional perspective.
- Authors
Widz, Marta; Kammerlander, Nadine
- Abstract
Current research has shown that entrepreneurial exit is driven by individual- and firm-level antecedents. We draw from neoinstitutional theory and propose that contextual factors affect family succession intentions as opposed to family-external exit intentions and theorize how regulative, normative, and cultural-cognitive institutional pillars affect exit intentions in the context of transition economies—a special case of emerging economies with no path dependence related to an entrepreneurial exit—characterized by institutional voids, which are filled in by the national culture. We argue and find—analyzing a sample of 222 Polish SME founders' survey responses—that labor market development decreases, normative pressure of reference groups increases, and paternalistic leadership style decreases family succession intentions. This study contributes to the literature about entrepreneurial exit, family firm succession, and neoinstitutional theory. Plain English Summary: Many firm founders intend to hand over their firms to their children in emerging economies. Why? National culture matters in young economies. At some time, all firm founders must plan to hand over their firm to a younger successor, who can be a family member or someone who is not from the family. We study how national culture makes founders prefer either family members or others as successors when they exit their firm. We suggest that institutions are particularly important drivers of exit choices in emerging economies and that national culture becomes a primary reference point for founders in those countries. To test our hypotheses, we collected survey responses from 222 Polish firm founders. We show that inefficient labor markets and a specific, paternalistic, leadership style increase preference for family-external exit. Peer pressure, however, increases the preference for family succession. This study's findings show that, in contrast to developed economies, family succession is still preferred in emerging economies.
- Subjects
EMERGING markets; INTENTION; FAMILY business succession; TRANSITION economies; FAMILY-owned business enterprises; PRESSURE groups
- Publication
Small Business Economics, 2023, Vol 60, Issue 2, p615
- ISSN
0921-898X
- Publication type
Article
- DOI
10.1007/s11187-022-00606-9