Working paper

Buying and Selling Entrepreneurial Assets

Alexandre Gaillard, and Sumudu Kankanamge


How are the options to buy and sell a business relevant for entrepreneurs? Prospective entrepreneurs value the purchase of mature firms while incumbents want to recover both the tangible and intangible value of their businesses upon exit. We introduce a theory of entrepreneurial assets transfer consistent with empirical evidence and centered around a businesses for sale market that lets entrepreneurs trade the maturity components of their firms. We find that shutting that market down leads to a substantial drop in aggregate output and alters the pool of firms, incentives to enter and exit, and the wealth distribution.


Entrepreneurship, Business transfers, Maturity value, Intangible assets;

JEL codes

  • E22: Capital • Investment • Capacity
  • E23: Production
  • D40: General
  • J24: Human Capital • Skills • Occupational Choice • Labor Productivity


Alexandre Gaillard, and Sumudu Kankanamge, Buying and Selling Entrepreneurial Assets, TSE Working Paper, n. 20-1078, February 2020, revised June 2020.

See also

Published in

TSE Working Paper, n. 20-1078, February 2020, revised June 2020