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Explicitly Implicit: How Institutional Differences Influence Entrepreneurship

In: Geography, Institutions and Regional Economic Performance

Author

Listed:
  • Stefan Bauernschuster

    (Ifo Institute and CESifo)

  • Oliver Falck

    (University of Munich (LMU) and CESifo)

  • Robert Gold

    (Max Planck Institute of Economics, Entrepreneurship, Growth, and Public Policy Group)

  • Stephan Heblich

    (University of Stirling, CESifo, IZA and SERC)

Abstract

Implicit institutions are shaped by societal norms and values. We expect them to impact an individual’s decision to become an entrepreneur. Exploiting a natural experiment in Germany’s recent history, we compare individuals born and raised in the former socialist East Germany to their West German counterparts. Our results show that the socialist regime shaped attitudes which are negatively associated with entrepreneurship. An analysis of East Germans who moved to West Germany after the fall of the Berlin Wall confirms that the socialist legacy not only runs through the channel of a less developed economic environment but indeed through implicit institutions.

Suggested Citation

  • Stefan Bauernschuster & Oliver Falck & Robert Gold & Stephan Heblich, 2013. "Explicitly Implicit: How Institutional Differences Influence Entrepreneurship," Advances in Spatial Science, in: Riccardo Crescenzi & Marco Percoco (ed.), Geography, Institutions and Regional Economic Performance, edition 127, pages 165-186, Springer.
    • Handle: RePEc:spr:adspcp:978-3-642-33395-8_9
    DOI: 10.1007/978-3-642-33395-8_9
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    Cited by:

    1. Stützer, Michael, 2023. "Entrepreneurship culture: Aggregate trait or collective programming of the mind?," Ilmenau Economics Discussion Papers 176, Ilmenau University of Technology, Institute of Economics.
    2. Jessie Bakens & Peter Nijkamp, 2013. "Immigrant Heterogeneity and Urban Development: A Conceptual Analysis," Advances in Spatial Science, in: Riccardo Crescenzi & Marco Percoco (ed.), Geography, Institutions and Regional Economic Performance, edition 127, pages 381-396, Springer.

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