Rethinking reward and business exit: evidence from the COVID-19 era

This chapter investigates why entrepreneurs continued their businesses despite the adverse economic conditions during COVID-19. Using Kahn’s psychological theory and the model of entrepreneurs’ emotional disengagement, the author finds that psychological rewards are the primary explanation for business continuity. The chapter also explores the emotional process that precedes business exit decisions. Specifically, entrepreneurs begin to emotionally disengage or ‘check out’ before making the final call to exit. This emotional disengagement serves as a mediator between psychological rewards and the decision to exit. This study offers several contributions to the existing literature. By highlighting the role of psychological rewards in exit decisions, this research challenges the prevalent focus on financial motives in entrepreneurs’ exit decisions. This work also unpacks the relationship between rewards and emotions and how they affect business exit decisions. In addition, this research’s actionable insights for entrepreneurs guide them to make choices that align with both their feelings and their business objectives.