IDEAS home Printed from https://ideas.repec.org/p/jrp/jrpwrp/2020-014.html
   My bibliography  Save this paper

One transition story does not fit them all: Initial regional conditions and new business formation after socialism

Author

Listed:
  • Michael Fritsch

    (Friedrich Schiller University Jenam and Halle Institute for Economic Research (IWH))

  • Maria Kristalova

    (Friedrich Schiller University Jena)

  • Michael Wyrwich

    (University of Groningen, and Friedrich Schiller University Jena)

Abstract

We investigate the reasons for the pronounced regional differences of new business formation after the transformation from a socialist planned system to a market economy in East Germany. Relatively high start-up rates are found in regions that had a well-qualified workforce and a relatively high share of remaining self-employed at the end of the socialist period. This also holds for high-tech manufacturing start-ups. Based on our conclusion that policy should account for these initial regional conditions, we use two criteria to introduce a classification of regions.

Suggested Citation

  • Michael Fritsch & Maria Kristalova & Michael Wyrwich, 2020. "One transition story does not fit them all: Initial regional conditions and new business formation after socialism," Jena Economic Research Papers 2020-014, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2020-014
    as

    Download full text from publisher

    File URL: http://www2.wiwi.uni-jena.de/Papers/jerp2020/wp_2020_014.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michael Wyrwich, 2012. "Regional Entrepreneurial Heritage in a Socialist and a Postsocialist Economy," Economic Geography, Clark University, vol. 88(4), pages 423-445, October.
    2. Michael Wyrwich, 2014. "Ready, set, go! Why are some regions entrepreneurial jump starters?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(2), pages 487-513, September.
    3. Franz Kronthaler, 2005. "Economic capability of East German regions: Results of a cluster analysis," Regional Studies, Taylor & Francis Journals, vol. 39(6), pages 739-750.
    4. Vladimir Popov, 2000. "Shock Therapy Versus Gradualism: The End Of The Debate (Explaining The Magnitude Of Transformational Recession)," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 42(1), pages 1-57, April.
    5. Franz Barjak, 2001. "Regional Disparities in Transition Economies: A Typology for East Germany and Poland," Post-Communist Economies, Taylor & Francis Journals, vol. 13(3), pages 289-311.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Uwe Blien & Franziska Hirschenauer & Phan Thi Hong Van, 2010. "Classification of regional labour markets for purposes of labour market policy," Papers in Regional Science, Wiley Blackwell, vol. 89(4), pages 859-880, November.
    2. Michael Fritsch & Elisabeth Bublitz & Alina Sorgner & Michael Wyrwich, 2014. "How much of a socialist legacy? The re-emergence of entrepreneurship in the East German transformation to a market economy," Small Business Economics, Springer, vol. 43(2), pages 427-446, August.
    3. Michael Wyrwich, 2020. "The value orientation of entrepreneurs in challenging institutional contexts: Insights from a unique historical episode," Jena Economic Research Papers 2020-001, Friedrich-Schiller-University Jena.
    4. Michael Wyrwich, 2014. "Ready, set, go! Why are some regions entrepreneurial jump starters?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(2), pages 487-513, September.
    5. Alex Segura-Ubiergo & Alejandro Simone & Sanjeev Gupta & Qiang Cui, 2010. "New Evidence on Fiscal Adjustment and Growth in Transition Economies," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 52(1), pages 18-37, March.
    6. Popov, Vladimir, 2001. "Reform Strategies and Economic Performance of Russia's Regions," World Development, Elsevier, vol. 29(5), pages 865-886, May.
    7. Vladimir Popov, 2009. "Why the West Became Rich before China and Why China Has Been Catching Up with the West since 1949: nother Explanation of the “Great Divergence” and “Great Convergence” Stories," Working Papers w0132, New Economic School (NES).
    8. Auty, R. M., 2003. "Third time lucky for Algeria? Integrating an industrializing oil-rich country into the global economy," Resources Policy, Elsevier, vol. 29(1-2), pages 37-47.
    9. Lawrence King & Patrick Hamm, 2005. "Privatization and State Capacity in Postcommunist Society," William Davidson Institute Working Papers Series wp806, William Davidson Institute at the University of Michigan.
    10. Polterovich, Victor, 2001. "Rent Seeking, Tax Policy, and Economic Growth," MPRA Paper 20058, University Library of Munich, Germany.
    11. Bauernschuster, Stefan & Falck, Oliver & Gold, Robert & Heblich, Stephan, 2012. "The shadows of the socialist past: Lack of self-reliance hinders entrepreneurship," European Journal of Political Economy, Elsevier, vol. 28(4), pages 485-497.
    12. Michael Fritsch & Pamela Mueller, 2008. "The effect of new business formation on regional development over time: the case of Germany," Small Business Economics, Springer, vol. 30(1), pages 15-29, January.
    13. Sonin, Konstantin, 2003. "Why the rich may favor poor protection of property rights," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 715-731, December.
    14. Катышев П.К. & Полтерович В.М., 2006. "Политика Реформ, Начальные Условия И Трансформационный Спад," Журнал Экономика и математические методы (ЭММ), Центральный Экономико-Математический Институт (ЦЭМИ), vol. 42(4), октябрь.
    15. Javier Changoluisa & Michael Fritsch, 2020. "New Business Formation and Incumbents’ Perception of Competitive Pressure," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 56(1), pages 165-197, February.
    16. Ksenia Yudaeva, 2002. "Globalization and Inequality in CIS Countries: Role of Institutions," Working Papers w0025, Center for Economic and Financial Research (CEFIR).
    17. Anna Lejpras & Andreas Stephan, 2011. "Locational conditions, cooperation, and innovativeness: evidence from research and company spin-offs," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(3), pages 543-575, June.
    18. Sipos-Gug Sebastian & Badulescu Alina-Daciana, 2013. "Entrepreneurial Activity In Romania - A Time Series Clustering Analysis At The Nuts3 Level," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 673-682, July.
    19. Michael Fritsch & Michael Wyrwich, 2012. "The Long Persistence of Regional Entrepreneurship Culture: Germany 1925-2005," Jena Economic Research Papers 2012-036, Friedrich-Schiller-University Jena.
    20. Mauricio Oyarzo & Gianni Romani & Miguel Atienza & Marcelo Lufin, 2015. "Spatio-temporal persistence of municipal rates of business start-ups in Chile," Documentos de Trabajo en Economia y Ciencia Regional 61, Universidad Catolica del Norte, Chile, Department of Economics, revised Jul 2015.

    More about this item

    Keywords

    Entrepreneurship; new business formation; regional conditions; transformation; East Germany;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • N94 - Economic History - - Regional and Urban History - - - Europe: 1913-
    • P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jrp:jrpwrp:2020-014. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.wiwiss.uni-jena.de/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Markus Pasche (email available below). General contact details of provider: http://www.wiwiss.uni-jena.de/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.