Entrepreneuriat et gestion des organisations

Empirical Study on Business Closures –Who should we be Concerned About?

Abstract

Niemelä TH

This article takes a closer look at entrepreneurial intentions among informants who had gone through a business closure process. Our interest was to understand better those ex-entrepreneurs who stated that they had no desire to start a business again. Business closure process is challenging at best, but it can also be a highly taxing and exhausting experience to the entrepreneur. We used bivariate analysis and logistic regression models to analyse and compare the data. Our analysis revealed that a total of 15% of entrepreneurs run a business after a genuine business closure whereas over half (51%) of interviewed entrepreneurs have business intentions and could imagine starting a business again. Those with no entrepreneurial intentions (32%) could be classified further into four groups: novice entrepreneurs operating in the service sector in rural locations who closed down their business after confidential discussions with other entrepreneurs (10% of those with negative entrepreneurial intentions), novice entrepreneurs with high basic education operating in central areas (26%, entrepreneurs with low level of education and networking activity, in manufacturing and operating in rural locations without any chance to avoid the firm clo-sure (26%), and most experienced, older entrepreneurs operating in non-rural locations (38%). Most of all, we should worry about the know-how and quality of experiences of entrepreneurs in the closure process as ideally they could be used to benefit both nascent and existing entrepreneurs. More generally, our results indicate that business closures can be associated with entrepreneurial learning, where the individual keeps the costs of learning low, while acquiring new knowledge and skills that can be utilized in new entrepreneurial action. Some policy implications also emerged.