Initial Conditions and Regional Performance in the Aftermath of Disruptive Shocks: The Case of East Germany after Socialism

Michael Fritsch () and Michael Wyrwich

No 2020-017, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: We investigate how initial conditions that existed in East Germany at the end of the socialist regime impact regional development during the turbulent shock transition to a market economic system. Our investigation spans a period of almost 30 years. Both the self-employment rate (an indication of the existence of a pre-socialist entrepreneurial tradition) and the share of the workforce with a tertiary degree have a strong positive effect on regional development. We conclude that knowledge and a tradition of entrepreneurship have long-run positive effects on development in regions that face disruptive shocks. Entrepreneurship and knowledge play a less important role for development across West German regions, where no significant shocks occurred.

Keywords: Entrepreneurship; knowledge; economic development; history; transformation; East Germany (search for similar items in EconPapers)
JEL-codes: L26 N93 N94 R11 (search for similar items in EconPapers)
Date: 2020-10-27
New Economics Papers: this item is included in nep-ent, nep-geo, nep-his, nep-ino and nep-ure
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Related works:
Journal Article: Initial conditions and regional performance in the aftermath of disruptive shocks: the case of East Germany after socialism (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2020-017

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