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The Protestant Ethic and Entrepreneurship: Evidence from Religious Minorities from the Former Holy Roman Empire

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  • Nunziata, Luca
  • Rocco, Lorenzo

Abstract

We propose a new methodology for identifying the causal effect of Protestantism versus Catholicism on the decision to become an entrepreneur. Our quasi-experimental research design exploits religious minorities' strong attachment to religious ethics and the exogenous historical determination of religious minorities' geographical distribution in the regions of the former Holy Roman Empire in the 1500s. We analyse European Social Survey data, collected in four waves between 2002 and 2008, and find that religious background has a significant effect on the individual propensity for entrepreneurship, with Protestantism increasing the probability to be an entrepreneur by around 5 percentage points with respect to Catholicism. Our findings are stable across a number of robustness checks, including accounting for migration patterns and a placebo test. We also provide an extended discussion of the assumptions' validity at the basis of our research design. This paper is one of the first attempts to identify a causal effect, rather than a simple correlation, of religious ethics on economic outcomes.

Suggested Citation

  • Nunziata, Luca & Rocco, Lorenzo, 2014. "The Protestant Ethic and Entrepreneurship: Evidence from Religious Minorities from the Former Holy Roman Empire," MPRA Paper 53566, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:53566
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    Cited by:

    1. Grytten, Ola Honningdal, 2020. "Weber revisited: A literature review on the possible Link between Protestantism, Entrepreneurship and Economic Growth," Discussion Paper Series in Economics 8/2020, Norwegian School of Economics, Department of Economics.
    2. Becker, Sascha O. & Pfaff, Steven & Rubin, Jared, 2016. "Causes and consequences of the Protestant Reformation," Explorations in Economic History, Elsevier, vol. 62(C), pages 1-25.
    3. Luca Nunziata & Lorenzo Rocco, 2016. "A tale of minorities: evidence on religious ethics and entrepreneurship," Journal of Economic Growth, Springer, vol. 21(2), pages 189-224, June.
    4. Sheremeta, Roman & Smith, Vernon, 2017. "The Impact of the Reformation on the Economic Development of Western Europe," MPRA Paper 87220, University Library of Munich, Germany.
    5. Nunziata, Luca & Rocco, Lorenzo, 2014. "A Tale of Minorities: Evidence on Religious Ethics and Entrepreneurship from Swiss Census Data," IZA Discussion Papers 7976, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Entrepreneurship; Religion; Culture; Protestantism; Catholicism.;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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