Abstract

The small yet growing body of literature on exit strategies has focused on whether an entrepreneur has an exit strategy in place, the type of exit strategy in place, and focused specifically on exit strategies in family firms. While the individual and firm level characteristics which influence the intended exit route has been investigated, contextual factors have been largely overlooked.

Embeddedness has been shown to be important for founding decisions. For example, most founders start businesses in the location where they were born or were previously employed. The markets served also tend to be local markets as the entrepreneur has better knowledge of the business opportunities in their local environment. Given the importance of embeddedness for founding decisions, it are also likely to play a role when entrepreneurs consider their exit strategies, however, how these contextual factors influence exit strategies remains underexplored.

We build on the typology developed by DeTienne et al., (2015) to incorporate how embeddedness influences the choice of exit strategy. We focus specifically on a regional context where embeddedness is likely to influence the available pool of buyers but where successful ownership transition is important for the vitality of the regional economy.

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