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Licensed Unlicensed Requires Authentication Published by De Gruyter February 23, 2013

Firm Resource Characteristics and Human Capital as Predictors of Exit Choice: An Exploratory Study of SMEs

  • Lex van Teeffelen EMAIL logo and Lorraine M. Uhlaner


This research focuses on exit choices within SMEs. In this study, “exit choice” refers to the decision to opt for either liquidation or sale of the firm. The predictions focus on human-capital and firm-resource variables. The hypotheses are tested on a set of 158 owners of small firms, the majority of which are micro-firms with 0–9 employees. The results of a series of binominal logistic regression analyses show that firm-resource characteristics (previous sales turnover, the firm’s independence from its owner, and firm size), together with one aspect of the owner’s specific human capital (the owner’s acquisition experience), predict exit choice. The conclusions have been made with caution, as the dataset is relatively small and the number of predictors is limited.


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  1. 1

    To define financial performance, we relied on self-reports rather than on balance sheets, as most owners of private firms are reluctant to share actual financial figures. This is not uncommon in small-firm research (Ghobadian and O’Regan 2006). Garg et al. (2003) advise using perceived performance in such situations.

Published Online: 2013-02-23

©2013 by Walter de Gruyter Berlin / Boston

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