Abstract
We investigate how self-employment in East Germany was impacted by 40 years of Soviet-style communism and the subsequent shock transition to a market economic system. To this end, we compare self-employment in East and West Germany after reunification with self-employment before the separation of Germany after World War II. Our results show that the strict anti-entrepreneurial policies prevalent during the Soviet regime do not have a long-run negative effect on self-employment in East Germany. Quite to the contrary, self-employment in East Germany today is higher than before German separation. This finding cannot be explained by necessity self-employment. Our analysis suggests that current differences in self-employment between East and West Germany are pre-dominantly a result of the sudden shock transformation that occurred with reunification, rather than the outcome of four decades of anti-entrepreneurial policies and ideology.
| Original language | English |
|---|---|
| Article number | 10422587221094498 |
| Pages (from-to) | 1594-1616 |
| Number of pages | 23 |
| Journal | Entrepreneurship Theory and Practice |
| Volume | 47 |
| Issue number | 5 |
| Early online date | 2022 |
| DOIs | |
| Publication status | Published - Sept 2023 |
Bibliographical note
Funding Information:We are indebted to Udo Brixy and Rolf Sternberg for information on opportunity and necessity entrepreneurship in East and West Germany. Financial support provided by the German Federal Ministry of Education and Research in the framework of a joint research project Modernisierungsblockaden in Wirtschaft und Wissenschaft der DDR (Obstacles to Modernization in the Economy and Science of the GDR) (project number 01UJ1806DY) is gratefully acknowledged.
Publisher Copyright:
© The Author(s) 2022.
Funding
We are indebted to Udo Brixy and Rolf Sternberg for information on opportunity and necessity entrepreneurship in East and West Germany. Financial support provided by the German Federal Ministry of Education and Research in the framework of a joint research project Modernisierungsblockaden in Wirtschaft und Wissenschaft der DDR (Obstacles to Modernization in the Economy and Science of the GDR) (project number 01UJ1806DY) is gratefully acknowledged.
| Funders | Funder number |
|---|---|
| Economy and Science of the GDR | 01UJ1806DY |
| Modernisierungsblockaden in Wirtschaft und Wissenschaft der DDR | |
| Bundesministerium für Bildung und Forschung |
Keywords
- Germany
- communism
- economic development
- entrepreneurship
- self-employment
- transition
