More than money: socioemotional wealth, rurality and small business owner exit intentions

Purpose We examine how socioemotional wealth (SEW) and rurality influence small-business owners' exit intentions. With over 50% of US small businesses owned by individuals over 55 and most lacking succession plans, understanding how non-financial factors drive exit intention is critical for economic continuity. Design/methodology/approach A multinomial logit model was used to analyze the exit intentions of 471 US small business owners. The sample was divided by age cohort to provide further insights into exit intention. The study employed the validated REI scale to measure SEW across four exit strategies. Findings Business owners with high SEW were more likely to choose stewardship strategies rather than liquidating or selling to outsiders. Both older and younger rural business owners were less likely to sell their business to outsiders. Female business owners were less likely to sell to family members. Minority business owners were less likely than White business owners to choose liquidation. Practical implications Results highlight the urgent need for succession planning education in rural communities. Policymakers and financial advisors could tailor succession resources by SEW score, provide more support for rural owners and design culturally responsive programs for minority owners. Originality/value Theoretically, we extend the behavior agency model by establishing SEW as a valid reference point for understanding loss aversion in exit decisions. Methodologically, we validate the REI scale for both family and non-family businesses, providing researchers with a reliable tool to measure SEW across heterogeneous contexts. Empirically, we document novel findings regarding how rurality and race shape exit intentions.