Explicitly Implicit: How Institutional Differences Influence Entrepreneurship

Stefan Bauernschuster, Oliver Falck, Robert Gold and Stephan Heblich

A chapter in Geography, Institutions and Regional Economic Performance, 2013, pp 165-186 from Springer

Abstract: Abstract Implicit institutions are shaped by societal norms and values. We expect them to impact an individual’s decision to become an entrepreneur. Exploiting a natural experiment in Germany’s recent history, we compare individuals born and raised in the former socialist East Germany to their West German counterparts. Our results show that the socialist regime shaped attitudes which are negatively associated with entrepreneurship. An analysis of East Germans who moved to West Germany after the fall of the Berlin Wall confirms that the socialist legacy not only runs through the channel of a less developed economic environment but indeed through implicit institutions.

Keywords: Entrepreneurship; Socialism; Occupational Choice (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1007/978-3-642-33395-8_9

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