Abstract:
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Using Global Entrepreneurship Monitor data for 41 countries this study
investigates the impact of business exit on entrepreneurial activity at the
country level. The paper distinguishes between two types of entrepreneurial
activity according with the motive to start a new business: entrepreneurs
driven by opportunity and necessity motives. The findings indicate that
exits have a positive impact on future levels of entrepreneurial activity in a
country. For each exit in a given year, a larger proportion of entrepreneurial
activity the following year. Moreover, this e ffect turns out to be higher
for opportunity entrepreneurs. The findings indicate that both types of
entrepreneurial activity rates are influenced by the same factors and in the
same direction. However, for some factors we find a di fferential impact on
the entrepreneurship. The results show some important implications given
that business exit may be overcome when there is a necessity motivation.
This has important implications for both researchers and policy makers.
JEL codes: L26.
Keywords: Entrepreneurship, business exit, social values |