This study examines the main drivers for the exit choice of small firm owners. Only recently studies have begun to compare the exits of mature firms. Previous studies concentrated on start-ups, primarily trying to explain survival. Exit choice as used in this study differentiates between liquidation vs. sale of the firm. Predictions are drawn from the cognitive biases in financial markets. Hypotheses propose that key drivers for exit choice vary on firm performance (well vs. poorly performing firms). Hypotheses are tested on a set of 157 small firm entrepreneurs, the majority of which are micro firms (0-9 employees). Results from binominal logistic regressions show support for the predictions: in well performing firms human capital or the characteristics of the entrepreneur (acquisition experience and years of ownership) prevail as key drivers, whereas in poorly performing firms the firm characteristics (dependency on owner and dependency on (few) customers) predict exit choice. These conclusions are made with caution, since interaction between firm performance and human capital is not significant.
