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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
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    References listed on IDEAS

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    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

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