The effect of household determinants and life course dynamics on the entrepreneurial exit decision

Abstract

The empirical focus of this paper explores the relative importance of household related life course determinants as predictors of entrepreneurial exit. Our primary research question is: do household dynamics have a gendered business exit-triggering effect? The extant literature exploring the process and consequences of exit for both the entrepreneur[s] and the venture is cited largely within the context of the market whereas the antecedents and consequences of the exit decision will also be shaped by social issues within the household or a change in domestic circumstances. As such, the nexus between the firm, the household and the entrepreneur shapes the exit decision. In this study we adopt a critical perspective and employ gender as our theoretical lens to enhance current understanding of business exit and offer alternative insights and explanations. We draw upon a positivist methodology accessing the British Household Panel Surey data of 816 business owners over 16 waves (1991 -2007) and employed random effect event history analysis. We note the critique of comparative quantitative approaches to exploring gender differences in entrepreneurship such that adopting 'gender as a variable' is deemed problematic when used to inform a gender biased epistemology based upon a presumption of nonnative masculinity. The focus is on three household conditions of which two are related to children and associated care responsibilities; while the other relates to spousal economic household contribution. In line with our hypotheses, we observed two conditions that account for the influence of children on entrepreneurial exit; whilst the higher number of children in the household equally discourages men and women from disengaging in entrepreneurial activity, women are more likely to seek exit options when they have responsibility for younger children. The positive effect of children on business exit is further amplified for female founders who take the primary childcue role and have responsibility for a larger proportion of domestic care within the household. We provide a more comprehensive picture of how a number of housebold dynamics can act as consistent predictors of entrepreneurial exit. Furthermore, our results imply that women are more strongly affected by household conditions than men. Our key contribution is the acknowledgement that the influence of household determinants on the exit decision is gendered. In doing so, we draw attention away from the normative explanation of business exit to a more socially embedded understanding that is positioned within the overlapping life courses of the individual, the business and the household.