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Technological Complexity and Economic Growth of Regions

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  • Michael Fritsch
  • Michael Wyrwich

Abstract

We investigate how initial conditions that existed in East Germany at the end of the socialist regime impact regional development during the turbulent shock transition to a market economic system. Our investigation spans a period of almost 30 years. Both the self-employment rate (an indication of the existence of a pre-socialist entrepreneurial tradition) and the share of the workforce with a tertiary degree have a strong positive effect on regional development. We conclude that knowledge and a tradition of entrepreneurship have long-run positive effects on development in regions that face disruptive shocks. Entrepreneurship and knowledge play a less important role for development across West German regions, where no significant shocks occurred.

Suggested Citation

  • Michael Fritsch & Michael Wyrwich, 2020. "Technological Complexity and Economic Growth of Regions," Papers in Evolutionary Economic Geography (PEEG) 2050, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Oct 2020.
    • Handle: RePEc:egu:wpaper:2050
    as

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    File URL: http://econ.geo.uu.nl/peeg/peeg2050.pdf
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    References listed on IDEAS

    as
    1. Michael Fritsch & Michael Wyrwich, 2017. "The effect of entrepreneurship on economic development—an empirical analysis using regional entrepreneurship culture," Journal of Economic Geography, Oxford University Press, vol. 17(1), pages 157-189.
    2. Michael Fritsch & Alina Sorgner & Michael Wyrwich & Evguenii Zazdravnykh, 2019. "Historical shocks and persistence of economic activity: evidence on self-employment from a unique natural experiment," Regional Studies, Taylor & Francis Journals, vol. 53(6), pages 790-802, June.
    3. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," NBER Chapters, in: Investment in Human Beings, pages 9-49, National Bureau of Economic Research, Inc.
    4. Zoltán J. Ács & Pontus Braunerhjelm & David B. Audretsch & Bo Carlsson, 2015. "The knowledge spillover theory of entrepreneurship," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 7, pages 129-144, Edward Elgar Publishing.
    5. Ark Bart van, 1995. "The Manufacturing Sector in East Germany: A Reassessment of Comparative Productivity Performance, 1950-1988," Jahrbuch für Wirtschaftsgeschichte / Economic History Yearbook, De Gruyter, vol. 36(2), pages 75-100, December.
    6. Michael Fritsch & Maria Kristalova & Michael Wyrwich, 2020. "Regional trajectories of entrepreneurship: the effect of socialism and transition," Jena Economics Research Papers 2020-010, Friedrich-Schiller-University Jena.
    7. 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.
    8. Michael Fritsch & Michael Wyrwich, 2019. "The Persistence of Regional Entrepreneurship," International Studies in Entrepreneurship, in: Regional Trajectories of Entrepreneurship, Knowledge, and Growth, chapter 0, pages 27-46, Springer.
    9. Radosevic, Slavo, 1999. "Transformation of science and technology systems into systems of innovation in central and eastern Europe: the emerging patterns and determinants," Structural Change and Economic Dynamics, Elsevier, vol. 10(3-4), pages 277-320, December.
    10. David B. Audretsch (ed.), 2006. "Entrepreneurship, Innovation and Economic Growth," Books, Edward Elgar Publishing, number 4130.
    11. Audretsch, David B. & Keilbach, Max C. & Lehmann, Erik E., 2006. "Entrepreneurship and Economic Growth," OUP Catalogue, Oxford University Press, number 9780195183511.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Entrepreneurship; knowledge; economic development; history; transformation; East Germany;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • N93 - Economic History - - Regional and Urban History - - - Europe: Pre-1913
    • N94 - Economic History - - Regional and Urban History - - - Europe: 1913-

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