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Historical Shocks and Persistence of Economic Activity: Evidence from a Unique Natural Experiment

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  • Michael Fritsch

    (School of Economics and Business Administration, Friedrich-Schiller-University Jena)

  • Alina Sorgner

    (School of Economics and Business Administration, Friedrich-Schiller-University Jena)

  • Michael Wyrwich

    (School of Economics and Business Administration, Friedrich-Schiller-University Jena)

  • Evguenii Zazdravnykh

    (National Research University, Higher School of Economics, Saint-Petersburg)

Abstract

This paper investigates the persistence of entrepreneurship in the region of Kaliningrad between 1925 and 2010. During this time period the area experienced a number of extremely disruptive shocks including; devastation caused by World War II, a nearly complete replacement of the native German population by Soviets, and 45 years under an anti- entrepreneurial socialist economic regime followed by a shock-type transition to a market economy. Nevertheless, we find a surprisingly high level of persistence of industry-specific self-employment rates in the districts of the Kaliningrad region. Our analysis suggests that persistence of entrepreneurship is higher in regions with a history of successful entrepreneurship. That is, in regions where a specific industry was particularly efficient and entrepreneurial activity was especially pronounced.

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  • Michael Fritsch & Alina Sorgner & Michael Wyrwich & Evguenii Zazdravnykh, 2016. "Historical Shocks and Persistence of Economic Activity: Evidence from a Unique Natural Experiment," Jena Economic Research Papers 2016-007, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2016-007
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    Cited by:

    1. Bijedić, Teita & Butkowski, Olivier K. & Kay, Rosemarie & Suprinovič, Olga, 2020. "Bestimmungsfaktoren des regionalen Gründungsgeschehens - eine Machbarkeitsstudie," IfM-Materialien 280, Institut für Mittelstandsforschung (IfM) Bonn.
    2. Michael Wyrwich, 2020. "Migration restrictions and long-term regional development: evidence from large-scale expulsions of Germans after World War II [The consequences of radical reform: the French revolution]," Journal of Economic Geography, Oxford University Press, vol. 20(2), pages 481-507.
    3. Fritsch, Michael & Obschonka, Martin & Wahl, Fabian & Wyrwich, Michael, 2020. "The deep imprint of Roman sandals: Evidence of long-lasting effects of Roman rule on personality, economic performance, and well-being in Germany," Hohenheim Discussion Papers in Business, Economics and Social Sciences 05-2020, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    4. Uwe Cantner & James A. Cunningham & Erik E. Lehmann & Matthias Menter, 2021. "Entrepreneurial ecosystems: a dynamic lifecycle model," Small Business Economics, Springer, vol. 57(1), pages 407-423, June.
    5. Zemtsov, S. & Tsareva, Y., 2018. "Entrepreneurial Activity in the Russian Regions: How Spatial and Temporal Effects Determine the Development of Small Business," Journal of the New Economic Association, New Economic Association, vol. 37(1), pages 145-165.

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    More about this item

    Keywords

    Entrepreneurship; regional culture; persistence;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • N94 - Economic History - - Regional and Urban History - - - Europe: 1913-
    • P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics
    • P5 - Economic Systems - - Comparative Economic Systems

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