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Does mode of transfer matter for business performance? Transfers to employees versus transfers to outsiders

Author

Listed:
  • Françoise Bastié

    (CREM, Université Normandie)

  • Sylvie Cieply

    (CREM, Université Normandie)

  • Pascal Cussy

    (CREM, Université Normandie)

Abstract

The way in which businesses are transferred does matter. This idea finds strong theoretical support from the theory of information and from the agency approach as applied to the issue of transferring small firms in which both ownership and management are typically transferred together. In this article, we compare two ways of transferring businesses: transfers to outsiders and transfers to employees. After identifying key advantages and disadvantages for each, we turn to a rich panel dataset on start-up and development conditions for new French businesses during the mid-2000s. Our results show that transfers to employees are more frequently long-lasting than transfers to outsiders. Our empirical investigation also shows that transfers to employees are less dynamic in terms of turnover growth than external transfers, but more dynamic in terms of job creation. We conclude the article by providing guidance on public action to promote business transfers.

Suggested Citation

  • Françoise Bastié & Sylvie Cieply & Pascal Cussy, 2018. "Does mode of transfer matter for business performance? Transfers to employees versus transfers to outsiders," Small Business Economics, Springer, vol. 50(1), pages 77-89, January.
    • Handle: RePEc:kap:sbusec:v:50:y:2018:i:1:d:10.1007_s11187-017-9903-5
    DOI: 10.1007/s11187-017-9903-5
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    References listed on IDEAS

    as
    1. Françoise Bastié & Sylvie Cieply & Pascal Cussy, 2013. "The entrepreneur's mode of entry: the effect of social and financial capital," Post-Print halshs-00658182, HAL.
    2. Saul Estrin & Derek C. Jones, 1992. "The Viability of Employee-Owned Firms: Evidence from France," ILR Review, Cornell University, ILR School, vol. 45(2), pages 323-338, January.
    3. Françoise Bastié & Sylvie Cieply & Pascal Cussy, 2013. "The entrepreneur’s mode of entry: the effect of social and financial capital," Small Business Economics, Springer, vol. 40(4), pages 865-877, May.
    4. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
    5. James J. Heckman & Hidehiko Ichimura & Petra Todd, 1998. "Matching As An Econometric Evaluation Estimator," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 65(2), pages 261-294.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Dirk Dohse & Rajeev K. Goel & Michael A. Nelson, 2019. "What induces firms to license foreign technologies? International survey evidence," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 40(7), pages 799-814, October.
    2. Ine Umans & Maarten Corten, 2023. "Ownership succession intentions affecting earnings management in private family firms," Small Business Economics, Springer, vol. 61(2), pages 827-842, August.

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    More about this item

    Keywords

    Business transfers; Transfers to employees; Transfers to outsiders; Performance;
    All these keywords.

    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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