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Post-Socialist Culture and Entrepreneurship

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  • Petrik Runst
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    Abstract

    In this paper it is argued that locus of control beliefs and preferences concerning state action negatively affect the formation of new firms in former socialist countries. For this purpose Kirzner's theory of costless entrepreneurship is reviewed and criticized. German reunification, in which the formerly Socialist East joined the Federal Republic of Germany, represents an intriguing natural experiment in which the formal institutional structure of one nation was almost fully transplanted into another. Traditional as well as psychological factors are examined. The results suggest that about one third of the east-west gap in new self-employment can be explained by inert informal institutions.

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    File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.372553.de/diw_sp0373.pdf
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    Bibliographic Info

    Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 373.

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    Length: 32 p.
    Date of creation: 2011
    Date of revision:
    Handle: RePEc:diw:diwsop:diw_sp373

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    Related research

    Keywords: Psychology of Entrepreneurship; Self-Employment; Transitional Economies; East Germany;

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    References

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    1. Alberto Chong & Jorge Guillen & Vanessa Rios, 2010. "Language Nuances and Socioeconomic Outcomes," American Journal of Economics and Sociology, Wiley Blackwell, vol. 69(2), pages 693-716, 04.
    2. Ruta Aidis, & Saul Estrin & Tomasz Mickiewicz, 2007. "Institutions and Entrepreneurship Development in Russia: A Comparative Perspective," Working Papers 79 Key Words: Entrepreneu, CENTRE FOR THE STUDY OF ECONOMIC AND SOCIAL CHANGE IN EUROPE,School of Slavonic and East European Studies,University College London (SSEES,UCL).
    3. Peter J. Boettke & Christopher J. Coyne & Peter T. Leeson, 2008. "Institutional Stickiness and the New Development Economics," American Journal of Economics and Sociology, Wiley Blackwell, vol. 67(2), pages 331-358, 04.
    4. George A. Akerlof & Rachel E. Kranton, 2000. "Economics And Identity," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 715-753, August.
    5. Earle, John S. & Sakova, Zuzana, 2000. "Business start-ups or disguised unemployment? Evidence on the character of self-employment from transition economies," Labour Economics, Elsevier, vol. 7(5), pages 575-601, September.
    6. Zoltan Acs & Pamela Mueller, 2008. "Employment effects of business dynamics: Mice, Gazelles and Elephants," Small Business Economics, Springer, vol. 30(1), pages 85-100, January.
    7. Mark Casson & Nigel Wadeson, 2007. "The Discovery of Opportunities: Extending the Economic Theory of the Entrepreneur," Small Business Economics, Springer, vol. 28(4), pages 285-300, April.
    8. Easton, Stephen T & Walker, Michael A, 1997. "Income, Growth, and Economic Freedom," American Economic Review, American Economic Association, vol. 87(2), pages 328-32, May.
    9. Bengoa, Marta & Sanchez-Robles, Blanca, 2003. "Foreign direct investment, economic freedom and growth: new evidence from Latin America," European Journal of Political Economy, Elsevier, vol. 19(3), pages 529-545, September.
    10. Joachim Ragnitz, 2003. "Wirkungen der Investitionsf├Ârderung in Ostdeutschland," IWH Discussion Papers 186, Halle Institute for Economic Research.
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    Cited by:
    1. Wyrwich, Michael, 2013. "Can socioeconomic heritage produce a lost generation with regard to entrepreneurship?," Journal of Business Venturing, Elsevier, vol. 28(5), pages 667-682.

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