One transition story does not fit them all: initial regional conditions and new business formation after communism

Michael Fritsch (), Maria Greve and Michael Wyrwich

Post-Communist Economies, 2022, vol. 34, issue 8, 1001-1028

Abstract: We investigate the reasons for the pronounced regional differences of new business formation after the transformation from a centrally planned system to a market economy in East Germany. Relatively high start-up rates are found in regions that had a well-qualified workforce and a relatively high share of self-employment left over at the end of the communist period. This also holds for high-tech manufacturing start-ups. Based on our conclusion that policy should account for these initial regional conditions, we use a measure of the regional knowledge base and self-employment at the end of the communist period to introduce a classification of regions.

Date: 2022
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DOI: 10.1080/14631377.2021.1943912

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