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Historical institutional differences and entrepreneurship: the case of socialist legacy in Vietnam

Author

Listed:
  • Christian Fisch

    (University of Trier)

  • Michael Wyrwich

    (University of Groningen, and FSU Jena)

  • Thi Lanh Nguyen
  • Joern H. Block

    (University of Trier)

Abstract

We study the case of Vietnam to assess the long-lasting role of institutional and historical legacy on entrepreneurial outcomes. In particular, we investigate the detrimental effect of socialist institutions on entrepreneurship. Vietnam offers a unique quasi-experimental setting because the country was divided into the socialist North and the nonsocialist South for a relatively short period of two decades. After re-unification the South adopted the institutional framework conditions of the North. To assess the relationship between socialist history and entrepreneurship in this unique setting, we survey more than 3,000 North and South Vietnamese individuals more than four decades after the re-unification of the country. We find that North Vietnamese respondents have lower entrepreneurship intention, are less likely to select into entrepreneurship education programs, and are less willing to engage in business takeover. These patterns indicate the persistence of a long-lasting influence of historical differences in institutional framework conditions on entrepreneurship. The long-run effect of socialism on entrepreneurship is apparently deeper than previously discovered in the prominent case of Germany, where differences in institutional treatment lasted for much longer and ended more recently.

Suggested Citation

  • Christian Fisch & Michael Wyrwich & Thi Lanh Nguyen & Joern H. Block, 2020. "Historical institutional differences and entrepreneurship: the case of socialist legacy in Vietnam," Jena Economics Research Papers 2020-002, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2020-002
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    More about this item

    Keywords

    Socialism; Vietnam; entrepreneurship intention; entrepreneurship education; takeover vs. new venture startup;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • P30 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - General

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