Self-Employment and Regional Development in Disruptive Times - Germany 1895 - 2020

Michael Fritsch () and Michael Wyrwich ()
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Michael Wyrwich: University of Groningen, The Netherlands, and Friedrich Schiller University Jena, Germany

No 2026-010, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: We examine the long-term relationship between historical levels of self-employment and economic performance in different regions of Germany. A particular distinction is made between West Germany and the eastern part of the country, that came after WWII for forty years under socialist regime. Regional self-employment rates exhibit high correlation over time periods exceeding a century. In West Germany, high and increasing levels of self-employment are significantly associated with high current levels of Gross Domestic Product (GDP) per population, despite several major historical shocks. That such a relationship cannot be found in East Germany could be a legacy of the socialist period where the government performed anti-entrepreneurial policies. We also find a positive relationship between historical self-employment and patenting in both parts of the country. This relationship is, however, somewhat weaker in East Germany, which experienced considerably more historical shocks than West Germany.

Keywords: Entrepreneurship; self-employment; regional prosperity; patenting; long-term effects (search for similar items in EconPapers)
JEL-codes: L26 O52 R11 (search for similar items in EconPapers)
Date: 2026-09-28
New Economics Papers: this item is included in nep-eec, nep-ent, nep-eur, nep-geo, nep-his and nep-inv
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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2026-010

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