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Establishment survival in East and West Germany: A comparative analysis

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  • Fackler, Daniel

Abstract

Using a large administrative dataset and methods of survival analysis, I analyze for the period 1994-2008 whether new establishments' survival chances differ between East and West Germany and whether they converged over time. I find that new establishments in East Germany had relatively good survival chances between 1994 and 1997, with no big differences between East and West Germany. In 1998 and 1999 the exit hazard increased strongly in East but not in West Germany, which is likely to be due to a change in the subsidy policy affecting East Germany. Since 2000 the difference in establishments' exit hazard between East and West Germany has become smaller and towards the end of the observation period it is not statistically significant anymore.

Suggested Citation

  • Fackler, Daniel, 2014. "Establishment survival in East and West Germany: A comparative analysis," Discussion Papers 90, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    • Handle: RePEc:zbw:faulre:90
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    Cited by:

    1. Schnabel Claus, 2016. "United, Yet Apart? A Note on Persistent Labour Market Differences between Western and Eastern Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(2), pages 157-179, March.
    2. Eberle, Johanna & Schmucker, Alexandra, 2017. "The establishment History Panel : Redesign and update 2016," FDZ Methodenreport 201703_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Boris HirschBy & Daniel S. J. Lechmann & Claus Schnabel, 2017. "Coming to work while sick: an economic theory of presenteeism with an application to German data," Oxford Economic Papers, Oxford University Press, vol. 69(4), pages 1010-1031.
    4. Kühnle, Daniel & Oberfichtner, Michael, 2017. "Does Early Child Care Attendance Influence Children's Cognitive and Non-Cognitive Skill Development?," IZA Discussion Papers 10661, Institute of Labor Economics (IZA).
    5. repec:iab:iabfme:201703(en is not listed on IDEAS
    6. Hirsch, Boris & Merkl, Christian & Müller, Steffen & Schnabel, Claus, 2014. "Centralized vs. decentralized wage formation: The role of firms' production technology," Kiel Working Papers 1927, Kiel Institute for the World Economy (IfW Kiel).
    7. Eberle Johanna & Schmucker Alexandra, 2017. "The Establishment History Panel – Redesign and Update 2016," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 237(6), pages 535-547, December.

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    More about this item

    Keywords

    startups; firm exits; East Germany;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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