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a self-employed father is found to have a large, negative and statistically significant effect

on the probability of exiting from self-employment for white men. Finally, using

German data, Bruderl and Preisendorfer (1998) provide some evidence that network

support from "strong ties" (which include spouses, parents, and relatives) improves

business outcomes. Unfortunately, they do not have information on whether these

individuals are business owners.

Perhaps not surprisingly, inherited businesses are more successful and larger than

non-inherited businesses. The coefficients are large, positive (negative in the closure

equation) and statistically significant in all specifications. Inheritances may represent a

form of transferring successful businesses across generations, but their overall

importance in determining small business outcomes is slight at best. Although the

coefficient estimates are large in the small business outcome equations, the relative

absence of inherited businesses (only 1.6 percent of all small businesses) suggests that

they play only a minor role in establishing an intergenerational link in self-employment.17

The strong effect of previous work experience in a family member's business on

small business outcomes suggests that family businesses provide an important

opportunity for family members to acquire human capital related to operating a business.

The general lack of significance of having a self-employed family member may indicate

that correlations across family members in entrepreneurial preferences are less important

in contributing to the intergenerational link in business success conditioning on business

ownership than in contributing to the intergenerational link in business ownership.

extremely large annual sales. As expected, the removal of business inheritances from the specifications does not affect the coefficients on other variables. 17

14

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