A Behavioural Theory of Entrepreneurial Exit: Decision-Making, Identity, and Context in Nigerian SME Dissolution and Continuation

This dissertation develops an original behavioural theory of entrepreneurial exit decision-making, examining how identity attachment, cognitive bias, emotional investment, and contextual social norms jointly shape the decisions of Nigerian small business owners to dissolve, sell, or pivot their enterprises when facing sustained underperformance. The entrepreneurial exit decision is one of the most consequential in the venture lifecycle, yet it is significantly undertheorised relative to enterprise creation, and existing exit research has focused primarily on planned exits including acquisition and IPO rather than the distress-driven dissolution and continuation decisions that are most relevant to the vast majority of Nigerian SMEs. The dissertation employs a two-phase research design: a qualitative phenomenological phase using interpretive phenomenological analysis of 35 in-depth interviews with Nigerian SME owners who have experienced or are currently facing critical exit-or-continue decisions, generating a rich account of the subjective experience of exit deliberation; followed by a behavioural experiment phase with 120 SME owners testing specific cognitive bias hypotheses generated from the phenomenological phase, including loss aversion, sunk cost fallacy, and identity-protective reasoning, in structured decision scenarios. The original Behavioural Entrepreneurial Exit Theory integrates identity threat theory, prospect theory, and social embeddedness theory to model exit decisions as identity-protective processes mediated by social accountability to family and community stakeholders, extending existing exit theory through the concept of social exit obligation as a culturally specific barrier to dissolution in Nigerian enterprise contexts. Keywords: entrepreneurial exit, behavioural theory, SME dissolution, identity, Nigeria.