The Protestant Ethic and Entrepreneurship: Evidence from Religious Minorities from the Former Holy Roman Empire

Luca Nunziata and Lorenzo Rocco

MPRA Paper from University Library of Munich, Germany

Abstract: We propose a new methodology for identifying the causal effect of Protestantism versus Catholicism on the decision to become an entrepreneur. Our quasi-experimental research design exploits religious minorities' strong attachment to religious ethics and the exogenous historical determination of religious minorities' geographical distribution in the regions of the former Holy Roman Empire in the 1500s. We analyse European Social Survey data, collected in four waves between 2002 and 2008, and find that religious background has a significant effect on the individual propensity for entrepreneurship, with Protestantism increasing the probability to be an entrepreneur by around 5 percentage points with respect to Catholicism. Our findings are stable across a number of robustness checks, including accounting for migration patterns and a placebo test. We also provide an extended discussion of the assumptions' validity at the basis of our research design. This paper is one of the first attempts to identify a causal effect, rather than a simple correlation, of religious ethics on economic outcomes.

Keywords: Entrepreneurship; Religion; Culture; Protestantism; Catholicism. (search for similar items in EconPapers)
JEL-codes: J21 J24 Z12 Z13 (search for similar items in EconPapers)
Date: 2014-02-11
New Economics Papers: this item is included in nep-ent, nep-evo, nep-gro, nep-his, nep-lma and nep-sog
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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