IDEAS home Printed from https://ideas.repec.org/p/jrp/jrpwrp/2021-007.html
   My bibliography  Save this paper

The COVID-19 Pandemic and Entrepreneurship in Germany: First Observations and Interpretations

Author

Listed:
  • Michael Fritsch

    (Friedrich Schiller University Jena, Germany)

  • Maria Greve

    (Friedrich Schiller University Jena, Germany and University of Groningen, The Netherlands)

  • Michael Wyrwich

    (University of Groningen, The Netherlands and Friedrich Schiller University Jena, Germany)

Abstract

The COVID-19 pandemic severely affected not only incumbent firms, but also the emergence of start-ups. This paper investigates and analyzes the pandemic's effect on new business formation, as well as business exits and insolvencies, in Germany. We find that the overall level of business registrations slightly decreased during the first year of the pandemic, but that the effect is specific to certain industries. Innovative manufacturing industries and technology-oriented services experienced an increase in numbers of start-ups. High subsidies and a temporary suspension of important criteria obliging firms to declare insolvency weakened market selection resulting in fewer exits in 2020. The relaxation of insolvency regulations may lead to considerable numbers of 'zombie' firms. Generally, the pandemic re-enforced ongoing structural change, but also exerted specific effects that may be temporary in nature.

Suggested Citation

  • Michael Fritsch & Maria Greve & Michael Wyrwich, 2021. "The COVID-19 Pandemic and Entrepreneurship in Germany: First Observations and Interpretations," Jena Economic Research Papers 2021-007, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2021-007
    as

    Download full text from publisher

    File URL: http://www2.wiwi.uni-jena.de/Papers/jerp2021/wp_2021_007.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    COVID-19; entrepreneurship; new business formation; Germany;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

    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:2021-007. 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.

    We have no bibliographic references for this item. You can help adding them by using 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.