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Regional Entrepreneurial Heritage in a Socialist and a Postsocialist Economy

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  • Michael Wyrwich

Abstract

Regions have a distinct entrepreneurial heritage, understood as a historical tradition in entrepreneurial culture. The persistence of that heritage in the former German Democratic Republic (GDR) is examined across severe ruptures in economic development. In this article, I argue that regional differences in private-sector activities under socialism—a system that was hostile toward entrepreneurs—reflect strong entrepreneurial orientations of local populations and regional cultures of entrepreneurship that were presocialist in origin. The empirical analysis suggests that an “entrepreneurial residual,” left over from the socialist experiment, positively affected startup activity after the transformation of the GDR back to a market economy. The results show that an entrepreneurial culture is an important regional resource that endures.

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  • 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.
    • Handle: RePEc:taf:recgxx:v:88:y:2012:i:4:p:423-445
    DOI: 10.1111/j.1944-8287.2012.01166.x
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    Cited by:

    1. 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.
    2. Michael Fritsch & Michael Wyrwich, 2014. "The Effect of Regional Entrepreneurship Culture on Economic Development - Evidence for Germany," Papers in Evolutionary Economic Geography (PEEG) 1411, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Apr 2014.
    3. Bauernschuster, Stefan & Falck, Oliver & Gold, Robert & Heblich, Stephan, 2012. "The shadows of the socialist past: Lack of self-reliance hinders entrepreneurship," European Journal of Political Economy, Elsevier, vol. 28(4), pages 485-497.
    4. Michael Fritsch & Michael Wyrwich, 2016. "Does persistence in start-up activity reflect persistence in social capital?," Chapters, in: Hans Westlund & Johan P. Larsson (ed.), Handbook of Social Capital and Regional Development, chapter 4, pages 82-107, Edward Elgar Publishing.
    5. Fredin , Sabrina & Jogmark , Marina, 2015. "The Formation of Local Culture and its Implications for Entrepreneurship," Papers in Innovation Studies 2015/37, Lund University, CIRCLE - Centre for Innovation Research.
    6. Michael Fritsch & Michael Wyrwich, 2023. "Entrepreneurship in the Long-Run: Empirical Evidence and Historical Mechanisms," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 19(1), pages 1-125, January.
    7. Michael Fritsch & Alina Rusakova, 2012. "Self-Employment after Socialism: Intergenerational Links, Entrepreneurial Values, and Human Capital," SOEPpapers on Multidisciplinary Panel Data Research 456, DIW Berlin, The German Socio-Economic Panel (SOEP).
    8. Michael Fritsch & Michael Wyrwich, 2017. "Persistence of Regional Entrepreneurship: Causes, Effects, and Directions for Future Research," Jena Economics Research Papers 2017-003, Friedrich-Schiller-University Jena.
    9. Michael Fritsch & Alina Sorgner & Michael Wyrwich & Evguenii Zazdravnykh, 2016. "Historical shocks and persistence of economic activity: evidence from a unique natural experiment," HSE Working papers WP BRP 143/EC/2016, National Research University Higher School of Economics.
    10. Michael Wyrwich, 2013. "In the name of my parents: Entrepreneurship and the intergenerational transmission of values," Jena Economics Research Papers 2013-031, Friedrich-Schiller-University Jena.
    11. Flade Falk & Kamosiński Sławomir, 2021. "‘Kapitalisten’ and ‘Prywaciarze’. A Comparison of Nationalisation Campaigns in the GDR and Poland," Studia Historiae Oeconomicae, Sciendo, vol. 39(1), pages 163-188, December.
    12. 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.
    13. Melita Nicotra & Marco Romano & Manlio Giudice & Carmela Elita Schillaci, 2018. "The causal relation between entrepreneurial ecosystem and productive entrepreneurship: a measurement framework," The Journal of Technology Transfer, Springer, vol. 43(3), pages 640-673, June.
    14. Ljunge, Martin & Stenkula, Mikael, 2021. "Fertile soil for intrapreneurship: impartial institutions and human capital," Journal of Institutional Economics, Cambridge University Press, vol. 17(3), pages 489-508, June.
    15. Jinchao Wang & Changfu Luo, 2022. "Social Mobility and Firms’ Total Factor Productivity: Evidence from China," Sustainability, MDPI, vol. 14(22), pages 1-19, November.
    16. Salvatore Corrente & Salvatore Greco & Melita Nicotra & Marco Romano & Carmela Elita Schillaci, 2019. "Evaluating and comparing entrepreneurial ecosystems using SMAA and SMAA-S," The Journal of Technology Transfer, Springer, vol. 44(2), pages 485-519, April.
    17. Martin Mabunda Baluku & Edward Bantu & Kathleen Otto, 2018. "Effect of Locus of Control on Entrepreneurial Attitudes and Self-Employment Intentions: The Moderating Role of Individualism," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 26(03), pages 251-283, September.
    18. Michael Fritsch & Maria Kristalova & Michael Wyrwich, 2020. "One transition story does not fit them all: Initial regional conditions and new business formation after socialism," Jena Economics Research Papers 2020-014, Friedrich-Schiller-University Jena.
    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. Oliver Falck & Michael Fritsch & Stephan Heblich, 2014. "Is industry location persistent over time? Evidence from coagglomeration patterns between new and incumbent firms in Germany," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 34(1), pages 1-21, February.
    21. Michael Fritsch & Elisabeth Bublitz & Alina Sorgner & Michael Wyrwich, 2014. "How much of a socialist legacy? The re-emergence of entrepreneurship in the East German transformation to a market economy," Small Business Economics, Springer, vol. 43(2), pages 427-446, August.
    22. Alexander Chepurenko & Maria Kristalova & Michael Wyrwich, 2019. "Historical and Institutional Determinants of Universities’ Role in Fostering Entrepreneurship," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 13(4), pages 48-59.
    23. Michael Wyrwich, 2020. "The value orientation of entrepreneurs in challenging institutional contexts: Insights from a unique historical episode," Jena Economics Research Papers 2020-001, Friedrich-Schiller-University Jena.

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    More about this item

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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