UDK 33 Экономика. Экономические науки
The research featured the issue of business termination. The COVID-19 pandemic hit small and medium-sized businesses all over the world. The research objective was to assess various economic indicators in order to explain why entrepreneurs had to abandon their business in 2020. The study was based on the economic and mathematical models that represent the functions of normal distribution. The author analyzed the opinions of entrepreneurs from 39 countries, who were asked to explain why they had to give up their business. The survey was part of the Global Monitoring of Entrepreneurship. The analysis revealed four indicators that determined the positive and negative reasons for the entrepreneurs to stop their business activities. The article introduces some new information about the impact of the COVID-19 pandemic on this process. Most entrepreneurs (56.3 %) gave up their business for some pandemic-unrelated negative reasons. A quarter of them (28 %) were forced to close their businesses due to the negative consequences of the pandemic. Only one-sixth of the participants terminated their business activities for a positive reason. Further research will assess the consequences of the pandemic in 2021.
entrepreneurship, exit from business, Covid-19 pandemic, survey of entrepreneurs, Global Monitoring of Entrepreneurship, normal distribution functions
1. Lattacher W., Wdowiak M. A. Entrepreneurial learning from failure. A systematic review. International Journal of Entrepreneurial Behavior & Research, 2020, 26(5): 1093–1131. https://doi.org/10.1108/IJEBR-02-2019-0085
2. He V. F., Sirén C., Singh S., Solomon G., Krogh G. von. Keep calm and carry on: emotion regulation in entrepreneurs' learning from failure. Entrepreneurship Theory and Practice, 2018, 42(4): 605–630. https://doi.org/10.1177/1042258718783428
3. Espinoza-Benavides J., Díaz D. The entrepreneurial profile after failure. International Journal of Entrepreneurial Behavior & Research, 2019, 25(8): 1634–1651. https://doi.org/10.1108/IJEBR-04-2018-0242
4. Ucbasaran D., Westhead P., Wright M., Flores M. The nature of entrepreneurial experience, business failure and comparative optimism. Journal of Business Venturing, 2010, 25(6): 541–555. https://doi.org/10.1016/j.jbusvent.2009.04.001
5. Singh S., Corner P. D., Pavlovich K. Failed, not finished: a narrative approach to understanding venture failure stigmatization. Journal of Business Venturing, 2015, 30(1): 150–166. https://doi.org/10.1016/j.jbusvent.2014.07.005
6. Yamakawa Y., Peng M. W., Deeds D. L. Rising from the ashes: cognitive determinants of venture growth after entrepreneurial failure. Entrepreneurship Theory and Practice, 2015, 39(2): 209–236. https://doi.org/10.1111/etap.12047
7. Jenkins A., McKelvie A. What is entrepreneurial failure? Implications for future research. International Small Business Journal, 2016, 34(2): 176–188. https://doi.org/10.1177/0266242615574011
8. Cucinotta D., Vanelli M. WHO declares COVID-19 a pandemic. Acta Biomed, 2020, 91(1): 157–160. https://doi.org/10.23750/abm.v91i1.9397
9. Nosachevskaya E. A. On topical issues of development of the Russian economy taking into account the consequences of the COVID-19 coronavirus pandemic. Evraziiskoe Nauchnoe Obedinenie, 2020, (7-4): 235–239. (In Russ.)
10. Martin A., Markhvida M., Hallegatte S., Walsh B. Socio-economic impacts of COVID-19 on household consumption and poverty. Economics of Disasters and Climate Change, 2020, 4(3): 453–479. https://doi.org/10.1007/s41885-020-00070-3
11. Murakami E., Shimizutani S., Yamada E. Projection of the effects of the COVID-19 pandemic on the welfare of remittance-dependent households in the Philippines. Economics of Disasters and Climate Change, 2021, 5(1): 97–110. https://doi.org/10.1007/s41885-020-00078-9
12. Fuente A. de la. The economic consequences of Covid in Spain and how to deal with them. Applied Economic Analysis, 2021, 29(85): 90–104. https://doi.org/10.1108/AEA-11-2020-0158
13. Nicola M., Alsafi Z., Sohrabi C., Kerwan A., Al-Jabir A., Iosifidis C., Agha M., Agha R. The socio-economic implications of the coronavirus pandemic (COVID-19): a review. International Journal of Surgery, 2020, 78: 185–193. https://doi.org/10.1016/j.ijsu.2020.04.018
14. Siche R. What is the impact of COVID-19 disease on agriculture? Scientia Agropecuaria, 2020, 11(1): 3–6. http://dx.doi.org/10.17268/sci.agropecu.2020.01.00
15. Golovnin M. Yu., Nikitina S. A. Channels of impact of the COVID-19 pandemic on Russia's economy. Bulletin of the Institute of Economics of the Russian Academy of Sciences, 2020, (5): 9–23. http://dx.doi.org/10.24411/2073-6487-2020-10053
16. Buheji M., Cunha K. da C., Godfred B., Mavrić B., Souza Y. L. do C. de, Silva S. S. da C., Hanafi M., Yein T. C. The extent of COVID-19 pandemic socio-economic impact on global poverty. A global integrative multidisciplinary review. American Journal of Economics, 2020, 10(4): 213–224. http://dx.doi.org/10.5923/j.economics.20201004.02
17. Adam N. A., Alarifi G. Innovation practices for survival of small and medium enterprises (SMEs) in the COVID-19 times: the role of external support. Journal of Innovation and Entrepreneurship, 2021, 10(15): 1–22. https://doi.org/10.1186/s13731-021-00156-6
18. Crane L. D., Decker R. A., Flaaen A., Hamins-Puertolas A., Kurz C. Business exit during the COVID-19 pandemic: non-traditional measures in historical context. Finance and Economics Discussion Series 2020-089, 2021, 58. https://doi.org/10.17016/FEDS.2020.089r1
19. Vitenu-Sackey P. A., Barfi R. The impact of Covid-19 pandemic on the global economy: emphasis on poverty alleviation and economic growth. The Economics and Finance Letters, 2021, 8(1): 32–43. https://doi.org/10.18488/journal.29.2021.81.32.43
20. Peters B. Early exits: exit strategies for entrepreneurs and angel investors (but maybe not venture capitalists). Vancouver: Meteor Bytes Data Management Corp., 2009, 195.
21. DeTienne D. R. Entrepreneurial exit as a critical component of the entrepreneurial process: theoretical development. Journal of Business Venturing, 2010, 25(2): 203–215. https://doi.org/10.1016/j.jbusvent.2008.05.004
22. Cefis E., Marsili O. Born to flip. Exit decisions of entrepreneurial firms in high-tech and low-tech industries. Journal of Evolutionary Economics, 2011, 21(3): 473–498. https://doi.org/10.1007/s00191-010-0210-4
23. Deenitchin I., Pikul P. Entrepreneurship: how to design growth and exit strategy. Economics and Business Review EBR, 2005, 5(2): 25–43.
24. Wennberg K. J., DeTienne D. R. What do we really mean when we talk about 'exit'? A critical review of research on entrepreneurial exit. International Small Business Journal, 2014, 32(1): 4–16. https://doi.org/10.1177/0266242613517126
25. Con Foo H. R. E., Breen J. P. Successful exit processes of SMEs in Australia. SEAANZ 2009: Proc. 22nd annual Conf. of the Small Enterprise Association of Australia and New Zealand, Wellington, 31 Aug – 2 Sep 2009. Wellington: Massey University, 2009, 28.
26. Cumming D. Contracts and exits in venture capital finance. The Review of Financial Studies, 2008, 21(5): 1947–1982. https://doi.org/10.1093/rfs/hhn072
27. Teeffelen L. van, Uhlaner L. M. Firm resource characteristics and human capital as predictors of exit choice: an exploratory study of SMEs. Entrepreneurship Research Journal, 2013, 3(1): 84–108. https://doi.org/10.1515/erj-2012-0008
28. Marjański A., Sułkowski Ł. The evolution of family entrepreneurship in Poland: main findings based on surveys and interviews from 2009–2018. Entrepreneurial Business and Economics Review, 2019, 7(1): 95–116. https://doi.org/10.15678/EBER.2019.070106
29. Sharma P., Chrisman J. J., Chua J. H. Predictors of satisfaction with the succession process in family firms. Journal of Business Venturing, 2003, 18(5): 667–687. https://doi.org/10.1016/S0883-9026(03)00015-6
30. DeTienne D. R., Cardon M. S. Impact of founder experience on exit intentions. Small Business Economics, 2012, 38(4): 351–374. https://doi.org/10.1007/s11187-010-9284-5
31. Egeln J., Falk U., Heger D., Höwer D., Metzger G. Ursachen für das scheitern junger unternehmen in den ersten fünf jahren ihres bestehens. EconStor, 2010, 110.
32. Aldrich H. E. Perpetually on the eve of destruction? Understanding exits in capitalist societies at multiple levels of analysis. Research Handbook of Entrepreneurial Exit, eds. DeTienne D. R., Wennberg K. J. Cheltenham; Northampton, MA: Edward Elgar Publishing, 2015, 11–41. https://doi.org/10.4337/9781782546979
33. Stokes D., Blackburn R. A. Learning the hard way: the lessons of owner-managers who have closed their businesses. Journal of Small Business and Enterprise Development, 2002, 9(1): 17–27. https://doi.org/10.1108/14626000210419455
34. Parastuty Z., Breitenecker R. J., Schwarz E. J., Harms R. Exploring the reasons and ways to exit: the entrepreneur perspective. Contemporary Entrepreneurship: Multidisciplinary Perspectives on Innovation and Growth, eds. Bögenhold D., Bonnet J., Dejardin M., Lema D. G. P. de. Cham: Springer, 2016, 159–172. https://doi.org/10.1007/978-3-319-28134-6_10
35. Cardon M. S., Stevens C. E., Potter D. R. Misfortunes or mistakes? Cultural sensemaking of entrepreneurial failure. Journal of Business Venturing, 2011, 26(1): 79–92. https://doi.org/10.1016/j.jbusvent.2009.06.004
36. Stokes D. R. Small Business Management, 4th ed. London: Continuum International Publishing Group, 2002, 413.
37. Ucbasaran D., Shepherd D. A., Lockett A., Lyon S. J. Life after business failure: the process and consequences of business failure for entrepreneurs. Journal of Management, 2013, 39(1): 163–202. https://doi.org/10.1177/0149206312457823
38. Pinkovetskaia Iu. S. Modeling the performance of small and medium entrepreneurship in regions by using density function of normal distribution. Problemy razvitiya territorii, 2015, (6): 93–107. (In Russ.)
39. Pinkovetskaia Iu. S., Nuretdinova Yu. V., Nuretdinov I. G., Lipatova N. N. Mathematical modeling on the base of functions density of normal distribution. Revista de la Universidad del Zulia, 2021, 12(33): 34–49. http://dx.doi.org/10.46925//rdluz.33.04
40. Pinkovetskaia Iu. S. Gender differences in business structures operating in trade, information and communication services. Vestnik Kemerovskogo gosudarstvennogo universiteta. Seriia: Politicheskie, sotsiologicheskie i ekonomicheskie nauki, 2021, 6(2): 248–255. (In Russ.) https://doi.org/10.21603/2500-3372-2021-6-2-248-255