The Shadows of the Past - How Implicit Institutions Influence Entrepreneurship
AbstractThis paper investigates the impact of implicit institutions on the decision to become an entrepreneur. Implicit institutions are here defined as mindsets that have developed as the result of norms and traditions and we expect they will have an influence on risk attitudes and opportunity recognition. We conduct a natural experiment based on Germany's recent history and compare individuals born and raised in the former socialist East Germany (GDR) with their West Germany (FRG) counterparts. Our analysis confirms the expected difference in values between individuals from East and West Germany and also shows that these differences influence the probability of being self-employed. In the process of our analysis, we also sketch the ongoing economical transition process in East Germany, which severely disturbs a proper analysis of the institutional differences from a macro-perspective.
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Bibliographic InfoPaper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2009-044.
Date of creation: 15 Jun 2009
Date of revision:
Implicit Institutions; Entrepreneurship; Socialism; Capitalism;
Find related papers by JEL classification:
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
- P39 - Economic Systems - - Socialist Institutions and Their Transitions - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-03 (All new papers)
- NEP-ENT-2009-07-03 (Entrepreneurship)
- NEP-HIS-2009-07-03 (Business, Economic & Financial History)
- NEP-HPE-2009-07-03 (History & Philosophy of Economics)
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- Michael Fritsch & Alina Rusakova, 2012.
"Self-Employment after Socialism: Intergenerational Links, Entrepreneurial Values, and Human Capital,"
Jena Economic Research Papers
2012-022, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- Michael Fritsch & Alina Rusakova, 2012. "Self-Employment after Socialism: Intergenerational Links, Entrepreneurial Values, and Human Capital," SOEPpapers on Multidisciplinary Panel Data Research 456, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Stefan Bauernschuster & Helmut Rainer, 2012. "Political regimes and the family: how sex-role attitudes continue to differ in reunified Germany," Journal of Population Economics, Springer, vol. 25(1), pages 5-27, January.
- Michael Fritsch & Elisabeth Bublitz & Alina Rusakova & Michael Wyrwich, 2012. "How Much of a Socialist Legacy? The Reemergence of Entrepreneurship in the East German Transformation to a Market Economy," Jena Economic Research Papers 2012-042, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
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