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Network or Independent Business? Entrepreneurs' Human, Social and Financial Capital as Determinants of Mode of Entry

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  • Françoise Bastié
  • Pascal Cussy
  • Anne‐Laure Le Nadant

Abstract

When establishing a new business, entrepreneurs can decide to join a network of independent business partners rather than choose the alternative of independent business ownership. In this study, we use a probit model on a large database to study the human, social, and financial capital of French entrepreneurs who join franchising and comparable forms of networks. Results confirm that initial levels of human and social capital are significant determinants of network membership. We also show that an increase in the proportion of the project financed by debt increases the probability of joining a network. Copyright © 2014 John Wiley & Sons, Ltd.

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  • Françoise Bastié & Pascal Cussy & Anne‐Laure Le Nadant, 2016. "Network or Independent Business? Entrepreneurs' Human, Social and Financial Capital as Determinants of Mode of Entry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 37(3), pages 167-181, April.
    • Handle: RePEc:wly:mgtdec:v:37:y:2016:i:3:p:167-181
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    Cited by:

    1. Steven C. Michael, 2022. "Investing in entrepreneurs: The case of franchising," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3785-3794, December.
    2. Weaven, Scott & Baker, Brent L. & Edwards, Chase & Frazer, Lorelle & Grace, Debra, 2018. "Predicting organizational form choice from pre-entry characteristics of franchisees," Australasian marketing journal, Elsevier, vol. 26(1), pages 49-58.
    3. Magali Chaudey & Muriel Fadairo & Frédéric Perdreau, 2020. "Do retailers benefit from network affiliation in all locations," Economics Bulletin, AccessEcon, vol. 40(2), pages 1623-1633.
    4. Evelien Croonen & Hans van Der Bij & Rozenn Perrigot & Assaad El Akremi & Olivier Herrbach, 2022. "Who wants to be a franchisee? Explaining individual intentions to become franchisees," Post-Print hal-03281669, HAL.
    5. Abdullah Promise Opute & Kalu Ibe Kalu & Ogechi Adeola & Chux Gervase Iwu, 2021. "Steering Sustainable Economic Growth: Entrepreneurial Ecosystem Approach," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 7(2), pages 216-245, July.

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