Passing the torch in knowledge-based SMEs: a dual-level moderated mediation analysis of business transfer readiness

Purpose The growing number of entrepreneurs exiting businesses is at risk for destroying small knowledge-based enterprises (KBEs). This study aims to investigate the cognitive mechanisms and dual-level boundary conditions associated with the willingness to sell amongst KBE owners. Design/methodology/approach The theory of planned behavior (TPB), knowledge-based view (KBV) and institutional theory were integrated to develop a dual-level mediated moderation model. Empirically, 315 KB-SME owners/managers from three large science and technology parks in Iran provided data. SmartPLS 4.0’s variance-based partial least squares-structural equation modeling (PLS-SEM) methodology was used to analyze the theoretically proposed model. Findings The results show that both transfer education and marketing awareness significantly impact an individual’s level of transfer readiness. These effects occur solely via the full mediation effect of perceived desirability. Importantly, neither the micro-level moderation (knowledge intensity) nor macro-level moderation (institutional support) paths were supported. In theory these unexpected results can be explained by the presence of “range restriction,” or “boundedness,” in highly concentrated innovation ecosystems and “institutional voids,” where the institutional environment is characterized by “bureaucratic obstacle-riddenness” in emerging markets. Practical implications Policymakers should move away from structurally based succession frameworks and design attitudinal/cognitive-based succession strategies. Bureaucratic friction has a greater effect on transfer readiness than simply enhancing formal institutional support. Originality/value This research expands existing entrepreneurial exit research by using a micro-macro boundary condition framework. Additionally, this paper creates an original theoretical positioning of previously insignificant institutional moderating effects, transforming empirically observed null findings into important theoretically driven findings about institutional voids within developing economies.