Gaillard, Alexandre and Kankanamge, Sumudu (2020) Buying and Selling Entrepreneurial Assets. TSE Working Paper, n. 20-1078, Toulouse

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Abstract

This paper introduces a theory of entrepreneurial assets transfer consistent with empirical evidence and centered around a business for sale market that values firms based on their intangible assets. We consider the key endogenous entrepreneurial choices to purchase, found, sell or liquidate business assets and the equilibrium price designed to capture both the intertemporal and the intangible value of a firm. We distinguish earlystage and mature firms as the latter are less likely to fail, make higher profits and face less stringent financial constraints. We argue that maturity translates the intangible value of a firm. We discipline our model using U.S. surveys and a new dataset of business selling transactions. We show that the absence of the business for sale market leads to a severe drop in aggregate output. Then, decomposing the effects of maturity, we show how they shape aggregate outcomes and wealth concentration.

Item Type: Monograph (Working Paper)
Language: English
Date: February 2020
Place of Publication: Toulouse
Uncontrolled Keywords: Entrepreneurship, Business transfers, Maturity value, Intangible assets
JEL Classification: D40 - General
E22 - Capital; Investment (including Inventories); Capacity
E23 - Production
J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 03 Mar 2020 10:12
Last Modified: 18 Mar 2021 11:36
OAI Identifier: oai:tse-fr.eu:124109
URI: https://publications.ut-capitole.fr/id/eprint/34098
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