IDEAS home Printed from https://ideas.repec.org/a/rai/joeems/doi_10.1688-1862-0019_jeems_2011_01_wyrwich.html
   My bibliography  Save this article

Coping with the market: Are there cohort effects for organisations in transition?

Author

Listed:
  • Michael Wyrwich
  • Ina Krause

Abstract

This paper investigates the employment growth of small and medium-sized firms that survived the transformation process of the German Democratic Republic (GDR). We find that firms founded in the later period of the GDR’s existence have especially low growth prospects, even 10 years after German reunification. The later phase of the GDR was marked by tightening measures intended to enhance political influence on the planned economy, accompanied by a sharp economic decline. Thus, organizations were more deeply embedded in planning structures that were more rigorous than those present in the first years of the GDR’s existence. We argue that these organizations therefore developed less appropriate practices for coping with a market economy than organizations founded in other periods.

Suggested Citation

  • Michael Wyrwich & Ina Krause, 2011. "Coping with the market: Are there cohort effects for organisations in transition?," Journal of East European Management Studies, Rainer Hampp Verlag, vol. 16(1), pages 54-74.
  • Handle: RePEc:rai:joeems:doi_10.1688/1862-0019_jeems_2011_01_wyrwich
    as

    Download full text from publisher

    File URL: http://www.hampp-verlag.de/hampp_e-journals_JEMS.htm#111
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Blum, U. & Dudley, L., 1996. "The Rise and Decline of the East German Economy, 1949-1989," Cahiers de recherche 9616, Universite de Montreal, Departement de sciences economiques.
    2. Horst Brezinski & Michael Fritsch (ed.), 1996. "The Economic Impact of New Firms in Post-socialist Countries," Books, Edward Elgar Publishing, number 736.
    3. Michael Fritsch, 2004. "Entrepreneurship, entry and performance of new business compared in two growth regimes: East and West Germany," Journal of Evolutionary Economics, Springer, vol. 14(5), pages 525-542, December.
    4. Zoltán J. Ács & Pamela Mueller, 2015. "Employment effects of business dynamics: Mice, Gazelles and Elephants," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 16, pages 304-319, Edward Elgar Publishing.
    5. Carlin, Wendy & Mayer, Colin, 1992. "Restructuring Enterprises in Eastern Europe," CEPR Discussion Papers 700, C.E.P.R. Discussion Papers.
    6. Matthias Almus, 2002. "What characterizes a fast-growing firm?," Applied Economics, Taylor & Francis Journals, vol. 34(12), pages 1497-1508.
    7. Bernd Martens, 2008. "East German economic elites and their companies two decades after the transformation ('Wende'): Still following the patterns of the 1990s," Journal of East European Management Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 13(4), pages 305-326.
    8. Thomas Lange & Geoffrey Pugh, 1998. "The Economics of German Unification," Books, Edward Elgar Publishing, number 794.
    9. Bernd Martens, 2008. "East German economic elites and their companies two decades after the transformation ('Wende'): Still following the patterns of the 1990s," Journal of East European Management Studies, Rainer Hampp Verlag, vol. 13(4), pages 305-326.
    10. Franz Barjak, 2001. "Regional Disparities in Transition Economies: A Typology for East Germany and Poland," Post-Communist Economies, Taylor & Francis Journals, vol. 13(3), pages 289-311.
    11. Delmar, Frederic & Davidsson, Per & Gartner, William B., 2003. "Arriving at the high-growth firm," Journal of Business Venturing, Elsevier, vol. 18(2), pages 189-216, March.
    12. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    13. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    14. Michael Keren, 1973. "The new economic system in the GDR: An obituary," Europe-Asia Studies, Taylor & Francis Journals, vol. 24(4), pages 554-587.
    15. Irwin L. Collier, 1990. "GDR Economic Policy during the Honecker Era," Eastern European Economics, Taylor & Francis Journals, vol. 29(1), pages 5-29, September.
    16. Busenitz, Lowell W. & Barney, Jay B., 1997. "Differences between entrepreneurs and managers in large organizations: Biases and heuristics in strategic decision-making," Journal of Business Venturing, Elsevier, vol. 12(1), pages 9-30, January.
    17. Eckhard Dittrich & Heiko Schrader & Christo Stojanov, 2008. "The development of small enterprises in Bulgaria, Czech Republic and the Russian Federation," Journal of East European Management Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 13(2), pages 129-153.
    18. Eckhard Dittrich & Heiko Schrader & Christo Stojanov, 2008. "The development of small enterprises in Bulgaria, Czech Republic and the Russian Federation," Journal of East European Management Studies, Rainer Hampp Verlag, vol. 13(2), pages 129-153.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Oertel, Simon, 2014. "Density imprints and organisations’ survival chances: a question of organisational ancestors," Journal of East European Management Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 19(1), pages 81-105.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michael Wyrwich, 2012. "Regional Entrepreneurial Heritage in a Socialist and a Postsocialist Economy," Economic Geography, Taylor & Francis Journals, vol. 88(4), pages 423-445, October.
    2. Michael Fritsch & Michael Wyrwich, 2012. "The Long Persistence of Regional Entrepreneurship Culture: Germany 1925-2005," Jena Economics Research Papers 2012-036, Friedrich-Schiller-University Jena.
    3. Alex Coad, 2007. "Firm Growth: a Survey," Post-Print halshs-00155762, HAL.
    4. Segarra Blasco, Agustí, 1958- & Teruel, Mercedes, 2014. "High-growth firms and innovation: an empirical analysis for Spanish firms," Working Papers 2072/228402, Universitat Rovira i Virgili, Department of Economics.
    5. Diego F. Grijalva & Valeria Ayala & Paúl A. Ponce & Yelitza Pontón, 2018. "Does firm innovation lead to high growth? Evidence from Ecuadorian firms," Revista Cuadernos de Economia, Universidad Nacional de Colombia, FCE, CID, vol. 37(75), pages 697-726, May.
    6. Michael Wyrwich, 2011. "New business formation and regional growth across regions with distinct initial industry structures," ERSA conference papers ersa10p656, European Regional Science Association.
    7. Erhardt, Eva, 2017. "Who persistently creates jobs? Absolute versus relative high-growth firms," MPRA Paper 79307, University Library of Munich, Germany.
    8. Yannis Caloghirou & Ioannis Giotopoulos & Alexandra Kontolaimou & Aggelos Tsakanikas, 2022. "Inside the black box of high-growth firms in a crisis-hit economy: corporate strategy, employee human capital and R&D capabilities," International Entrepreneurship and Management Journal, Springer, vol. 18(3), pages 1319-1345, September.
    9. Erhardt, Eva, 2018. "Does high growth persist? A focus on growth formulas and the influence of firm exits," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181595, Verein für Socialpolitik / German Economic Association.
    10. Fabio Bertoni & Massimo Colombo & Luca Grilli, 2013. "Venture capital investor type and the growth mode of new technology-based firms," Small Business Economics, Springer, vol. 40(3), pages 527-552, April.
    11. Agustí Segarra & Mercedes Teruel, 2014. "High-growth firms and innovation: an empirical analysis for Spanish firms," Small Business Economics, Springer, vol. 43(4), pages 805-821, December.
    12. Erhardt, Eva Christine, 2018. "Firm performance after high growth: A comparison of absolute and relative growth measures," MPRA Paper 88077, University Library of Munich, Germany.
    13. Fritsch, Michael, 2013. "New Business Formation and Regional Development: A Survey and Assessment of the Evidence," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 9(3), pages 249-364, February.
    14. Michael Wyrwich, 2014. "Ready, set, go! Why are some regions entrepreneurial jump starters?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(2), pages 487-513, September.
    15. Eva Christine Erhardt, 2021. "Measuring the persistence of high firm growth: choices and consequences," Small Business Economics, Springer, vol. 56(1), pages 451-478, January.
    16. Simon Parker & David Storey & Arjen Witteloostuijn, 2010. "What happens to gazelles? The importance of dynamic management strategy," Small Business Economics, Springer, vol. 35(2), pages 203-226, September.
    17. Michael Fritsch, 2011. "The effect of new business formation on regional development - Empirical evidence, interpretation, and avenues for further research," Jena Economics Research Papers 2011-006, Friedrich-Schiller-University Jena.
    18. Michael Fritsch, 2008. "How does new business formation affect regional development? Introduction to the special issue," Small Business Economics, Springer, vol. 30(1), pages 1-14, January.
    19. Michael Fritsch & Michael Wyrwich, 2012. "The Long Persistence of Regional Entrepreneurship Culture: Germany 1925-2007," ERSA conference papers ersa12p63, European Regional Science Association.
    20. Paul W. Miller & Barry R. Chiswick, 2002. "Immigrant earnings: Language skills, linguistic concentrations and the business cycle," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(1), pages 31-57.

    More about this item

    Keywords

    transition; East Germany; organizational learning; employment growth;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rai:joeems:doi_10.1688/1862-0019_jeems_2011_01_wyrwich. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Rainer Hampp (email available below). General contact details of provider: http://www.hampp-verlag.de/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.