"I want this firm to be in good hands:" Emotional pricing of resigning entrepreneurs

Item Type Journal paper
Abstract

Given the importance of non-economic considerations throughout the entrepreneurial life cycle, I aim to investigate the drivers of owner-managers' "emotional pricing" when they wish to sell their firms to successors. Emotional pricing thereby denotes those elements of the owner-managers' price expectations that cannot be traced back to economic considerations. Building on arguments from behavioral finance, I hypothesize that "emotional pricing," which in this study reflects owner-managers' willingness to sell the firm at a discount, is driven by the reluctance to lose access to information about the firm and to lose influence on the firm, and by an aversion to putting the firm's future at risk. In particular, I argue that a long-term relationship between an owner-manager and a firm, a familiar relationship between an owner-manager and a successor, and situational contingencies-especially unsatisfactory firm performance-increase the owner-manager's emotional-pricing component. I test the hypotheses using a sample of 1,354 owner-managers of Swiss SMEs, who provided their views on their exit intentions. I subsequently compare those results to 455 actual ownership transfers involving Swiss SMEs.

Authors Kammerlander, Nadine
Projects Halter, Frank; Zellweger, Thomas; Frey, Urs; Schröder, Ralf; Sieger, Philipp; Ganter, Melanie; Kammerlander, Nadine & Kissling Streuli, Sonja (2004) Unternehmensnachfolge [fundamental research project] Official URL
Journal or Publication Title International Small Business Journal
Language English
Subjects business studies
HSG Classification contribution to scientific community
Refereed Yes
Date 3 June 2014
Publisher Sage
Place of Publication London
Volume 2014
Number in press
Page Range 1-40
Number of Pages 40
ISSN 0266-2426
ISSN-Digital 1741-2870
Depositing User Prof. Dr. Nadine Kammerlander
Date Deposited 03 Jun 2014 21:18
Last Modified 23 Aug 2016 11:19
URI: https://www.alexandria.unisg.ch/publications/231933

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Citation

Kammerlander, Nadine (2014) "I want this firm to be in good hands:" Emotional pricing of resigning entrepreneurs. International Small Business Journal, 2014 (in press). 1-40. ISSN 0266-2426

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https://www.alexandria.unisg.ch/id/eprint/231933
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