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Entrepreneurship in Transition Economies: The Role of Institutions and Generational Change

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  • Estrin, Saul

    ()
    (London School of Economics)

  • Mickiewicz, Tomasz

    ()
    (University College London)

Abstract

The transition economies have lower rates of entrepreneurship than are observed in most developed and developing market economies. The difference is even more marked in the countries of the former Soviet Union than those of Central and Eastern Europe. We link these differences partly with the legacy of communist planning, which needs to be replaced with formal market-supporting institutions. But many of these developments have now taken place, yet entrepreneurial activity still remains low in many places. To analyse this longer term issue, we highlight the necessarily slow pace of development of new informal institutions and the corresponding social attitudes, notably rebuilding the generalised trust. We argue that changes are even slower in the former Soviet Union than Central and Eastern Europe because communist rule was much longer, leading to a lack of institutional memory. We posit that changes in informal institutions may be therefore delayed until after full generational change.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4805.

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Length: 43 pages
Date of creation: Mar 2010
Date of revision:
Publication status: published in: Maria Minniti (ed.) 2011, The Dynamics of Entrepreneurship: Evidence from Global Entrepreneurship Monitor Data, Oxford, pp.181-208
Handle: RePEc:iza:izadps:dp4805

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Related research

Keywords: institutional arrangements; shadow economy; formal and informal sectors; entrepreneurship; comparative studies of countries;

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References

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Citations

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Cited by:
  1. Hinh T. Dinh & Thomas G. Rawski & Ali Zafar & Lihong Wang & Eleonora Mavroeidi, 2013. "Tales from the Development Frontier : How China and Other Countries Harness Light Manufacturing to Create Jobs and Prosperity," World Bank Publications, The World Bank, number 15763, October.
  2. Joanna Tyrowicz & Joanna Nestorowicz, 2010. "Cynicism Starts Young: Age and Entrepreneurship over Transition," Working Papers 2010-02, Faculty of Economic Sciences, University of Warsaw.
  3. Shurchkov, Olga, 2012. "New elites and their influence on entrepreneurial activity in Russia," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 240-255.
  4. Tyrowicz, Joanna, 2011. "What distinguishes entrepreneurs? Evidence on the motives for self-employment," Economics Letters, Elsevier, vol. 112(3), pages 226-229, September.
  5. Maksim Belitski & Julia Korosteleva, 2011. "Entrepreneurship and Cities: Evidence from the Post-communist World," WIFO Working Papers 397, WIFO.
  6. Ognjenovic, Dragana & Bajramovic, Sabahudin & Nikolic, Aleksandra, 2012. "Economic Performances Of Dairy Industry In Bosnia And Herzegovina In Transition," 132nd Seminar, October 25-27, 2012, Skopje, Republic of Macedonia 139499, European Association of Agricultural Economists.
  7. 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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