Empirical Study on Business Closures –Who should we be Concerned About?
Niemelä TH* and Kauko-Valli S
Research Professor (Entrepreneurship), University of Jyväskylä School of Business and Economics PO Box 35 FIN-40014 Jyväskylä University, Finland
- *Corresponding Author:
- Niemelä TH
PhD, University of Jyväskylä School of
Business and Economics PO Box 35
FIN-40014 Jyväskylä University, Finland
E-mail: [email protected]
Received Date: October 27, 2014; Accepted Date: November 19, 2014; Published Date: November 26, 2014
Citation: Niemelä TH, Valli SK (2014) Empirical Study on Business Closures –Who should we be Concerned About? J Entrepren Organiz Manag 3:122. doi: 10.4172/2169-026X.1000122
Copyright: ©2014 Niemelä TH, et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
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.