The growing need for take-over entrepreneurs: how Threshold Theory may direct students’ preferences

Authors Lex van Teeffelen , Lorraine Uhlaner
Published in Conference papers of the AEI Conference, April 2013, EDHEC Business School, Lille
Publication date 2013
Type Lecture

Summary

There is a strong need for successors in SMEs in Western innovative economies. This research paper investigates qualitatively if students change their entrepreneurial entry preference if they are presented different kinds of entrepreneurial entry options. We propose that students’ preferences are mediated by Threshold Theory: choice options, opportunity costs and psychological income. The qualitative analyses, using 31 case studies, corroborate most of our propositions, also showing that human capital (entrepreneurial and management experience) and traits (perseverance, flexibility, creativity and risk tolerance) and competencies (market awareness, network building) are related towards choice options and opportunity costs. By presenting different modes of entrepreneurial entry we observe a shift in students’ preference from start-up entrepreneurship towards franchising. Though students show a clear interest in family succession or firm acquisitions they are held back by financial thresholds (the higher need for financial capital) and a lack of human capital (entrepreneurial or management experience). Franchising could be seen as an intermediary step for succession, since it helps to build entrepreneurial experience and has lower financial threshold

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  • Lex van Teeffelen
    Lex van Teeffelen
    • Professor
    • Research groups: Financial-Economic Advice in Innovation

Language English
Published in Conference papers of the AEI Conference, April 2013, EDHEC Business School, Lille

Lex van Teeffelen

Lex van Teeffelen

Lex van Teeffelen

  • Professor
  • Research group: Financial-Economic Advice in Innovation