Table 2: Variable means
|
Variable |
Mean |
Unit |
Variable |
Mean |
Unit |
|
Main covariates I: Closure reasons a |
Control variables | ||||
|
DEBTS |
23.7 |
% |
CAPITAL |
64.7 |
‘000 € |
|
NOTWORTH |
37.9 |
% |
CAPITALM |
33.9 |
% |
|
ILLIQUIDITY |
45.3 |
% |
TEAM |
55.5 |
% |
|
WAGEEMPL |
5.5 |
% |
TEAMM |
7.3 |
% |
|
RETIRE |
4.1 |
% |
LIMITED |
48.9 |
% |
|
PRIVATE |
12.8 |
% |
SIZE |
11.8 |
# Employees |
|
OTHERREAS |
21.2 |
% |
SIZEM |
8.4 |
% |
|
QUARREL |
13.7 |
% |
AGE |
4.1 |
Years |
|
_AGEM |
3.6 |
% | |||
|
Main covariates II: Bearer of financial losses a |
EAST |
51.6 |
% | ||
|
Sharehol |
61.0 |
% |
HTIND |
2.0 |
% |
|
BANKS |
21.6 |
% |
OTHERIND |
11.4 |
% |
|
OTHERSTAKE |
30.7 |
% |
TECHSERV |
4.8 |
% |
|
OTHERSERV |
6.8 |
% | |||
|
CONSTRUCT |
20.5 |
% | |||
|
TRADE_________ |
37.1 |
%____ |
a Multiple statements were possible.
Source: ZEW Entrepreneurship Study.
The measures WAGEEMPL and RETIRE indicate a shift in the source of income. However,
as WAGEEMPL is insignificant, a return to the workforce does not affect the likelihood of
restart. RETIRE, by contrast, is significantly negative, meaning that in most cases enter-
ing retirement is a final decision. A significantly negative effect on the likelihood of re-
start is also associated with the variable PRIVATE. Business closure due to private rea-
sons such as illness makes restart more unlikely, while OTHERREAS, i.e., unspecified
other reasons, is insignificant, thus having no impact. If an argument within the entre-
preneurial team was a reason for business closure, this seems - for logical reasons - to
encourage entrepreneurs to venture anew; the effect of QUARREL is significantly positive.
Table 3 provides the probit estimation results. Effects arising from the closure-reason
indicators are shown in the upper part of the table followed by the effects arising from
the loss measures in the lower part. The second and third row presents results for the
first specification which omits the loss indicators. The effect of the measure DEBTS is
significantly positive in this first specification. There is thus evidence that closures indica-
tive of business failure reduce the likelihood of restart, confirming the findings of
Metzger, 2008). NOTWORTH is not significant either, meaning that if entrepreneurs close
a business because it fails to meet their target performance threshold, their restart prob-
ability is not affected by this experience. Liquidity problems are the most important clo-
sure reason, but do not affect the restart decision, as suggested by the insignificance of
the ILLIQUIDITY indicator.
The measures WAGEEMPL and RETIRE indicate a shift in the source of income. However,
as WAGEEMPL is insignificant, a return to the workforce does not affect the likelihood of
restart. RETIRE, by contrast, is significantly negative, meaning that in most cases enter-
ing retirement is a final decision. A significantly negative effect on the likelihood of re-
start is also associated with the variable PRIVATE. Business closure due to private rea-
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