[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/egu/wpaper/1411.html
   My bibliography  Save this paper

The Effect of Regional Entrepreneurship Culture on Economic Development - Evidence for Germany

Author

Listed:
  • Michael Fritsch
  • Michael Wyrwich
Abstract
We use the historical self-employment rate as an indicator of a regional culture of entrepreneurship and link this measure to economic growth in recent periods. The results indicate that German regions with a high level of entrepreneurship in the mid-1920s have higher start-up rates about 80 years later. Furthermore, we find that the effect of current start-up activity on regional employment is significantly higher in regions with a pronounced entrepreneurial culture. We conclude that a regional culture of entrepreneurship is an important resource for regional growth.

Suggested Citation

  • 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.
    • Handle: RePEc:egu:wpaper:1411
    as

    Download full text from publisher

    File URL: http://econ.geo.uu.nl/peeg/peeg1411.pdf
    File Function: Version April 2014
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Andreas Freytag & Roy Thurik, 2010. "Entrepreneurship and its Determinants in a Cross-Country Setting," Springer Books, in: Andreas Freytag & Roy Thurik (ed.), Entrepreneurship and Culture, chapter 0, pages 157-170, Springer.
    2. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
    3. Bosma, Niels & Hessels, Jolanda & Schutjens, Veronique & Praag, Mirjam Van & Verheul, Ingrid, 2012. "Entrepreneurship and role models," Journal of Economic Psychology, Elsevier, vol. 33(2), pages 410-424.
    4. Stephen J. Redding & Daniel M. Sturm, 2008. "The Costs of Remoteness: Evidence from German Division and Reunification," American Economic Review, American Economic Association, vol. 98(5), pages 1766-1797, December.
    5. Andrew Bernard & Joachim Wagner, 1997. "Exports and success in German manufacturing," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 133(1), pages 134-157, March.
    6. Hans Westlund & Johan P. Larsson & Amy Olsson, 2012. "Startups and Local Social Capital in the Municipalities of Sweden," ERSA conference papers ersa12p91, European Regional Science Association.
    7. Michael Fritsch & Oliver Falck, 2007. "New Business Formation by Industry over Space and Time: A Multidimensional Analysis," Regional Studies, Taylor & Francis Journals, vol. 41(2), pages 157-172.
    8. Claudio Michelacci & Olmo Silva, 2007. "Why So Many Local Entrepreneurs?," The Review of Economics and Statistics, MIT Press, vol. 89(4), pages 615-633, November.
    9. Hans Westlund & Frane Adam, 2009. "Social Capital and Economic Performance: A Meta-analysis of 65 Studies," European Planning Studies, Taylor & Francis Journals, vol. 18(6), pages 893-919, November.
    10. Westlund, Hans & Bolton, Roger, 2003. "Local Social Capital and Entrepreneurship," Small Business Economics, Springer, vol. 21(2), pages 77-113, September.
    11. Sjoerd Beugelsdijk & Niels Noorderhaven, 2004. "Entrepreneurial attitude and economic growth: A cross-section of 54 regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 38(2), pages 199-218, June.
    12. Michael Wyrwich, 2012. "Regional Entrepreneurial Heritage in a Socialist and a Postsocialist Economy," Economic Geography, Clark University, vol. 88(4), pages 423-445, October.
    13. Guido Tabellini, 2010. "Culture and Institutions: Economic Development in the Regions of Europe," Journal of the European Economic Association, European Economic Association, vol. 8(4), pages 677-716, June.
    14. 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.
    15. Jens Suedekum, 2006. "Concentration and Specialization Trends in Germany since Re-unification," Regional Studies, Taylor & Francis Journals, vol. 40(8), pages 861-873.
    16. 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.
    17. Audretsch, D.B. & Fritsch, M., 1993. "A Note on the Measurement of Entry Rates," Papers 93-5, Bergakademie Freiberg Technical University - Faculty of Economics and Business Administration.
    18. North, Douglass C, 1994. "Economic Performance through Time," American Economic Review, American Economic Association, vol. 84(3), pages 359-368, June.
    19. 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.
    20. Martin Obschonka & Eva Schmitt-Rodermund & Rainer K. Silbereisen & Samuel D. Gosling & Jeff Potter, 2013. "The Regional Distribution and Correlates of an Entrepreneurship-Prone Personality Profile in the United States, Germany, and the United Kingdom: A Socioecological Perspective," SOEPpapers on Multidisciplinary Panel Data Research 550, DIW Berlin, The German Socio-Economic Panel (SOEP).
    21. Sjoerd Beugelsdijk, 2010. "Entrepreneurial Culture, Regional Innovativeness and Economic Growth," Springer Books, in: Andreas Freytag & Roy Thurik (ed.), Entrepreneurship and Culture, chapter 0, pages 129-154, Springer.
    22. Davidsson, Per & Wiklund, Johan, 1997. "Values, beliefs and regional variations in new firm formation rates," Journal of Economic Psychology, Elsevier, vol. 18(2-3), pages 179-199, April.
    23. Hall, John & Ludwig, Udo, 1995. "German Unification and the 'Market Adoption' Hypothesis," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 19(4), pages 491-507, August.
    24. Yuko Aoyama, 2009. "Entrepreneurship and Regional Culture: The Case of Hamamatsu and Kyoto, Japan," Regional Studies, Taylor & Francis Journals, vol. 43(3), pages 495-512.
    25. Michael Fritsch & Pamela Mueller, 2007. "The persistence of regional new business formation-activity over time – assessing the potential of policy promotion programs," Journal of Evolutionary Economics, Springer, vol. 17(3), pages 299-315, June.
    26. Oliver E. Williamson, 2000. "The New Institutional Economics: Taking Stock, Looking Ahead," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 595-613, September.
    27. Martin Andersson & Sierdjan Koster, 2011. "Sources of persistence in regional start-up rates--evidence from Sweden," Journal of Economic Geography, Oxford University Press, vol. 11(1), pages 179-201, January.
    28. 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.
    29. David Audretsch & Michael Fritsch, 2002. "Growth Regimes over Time and Space," Regional Studies, Taylor & Francis Journals, vol. 36(2), pages 113-124.
    30. Hethey, Tanja & Schmieder, Johannes F., 2010. "Using worker flows in the analysis of establishment turnover : evidence from German administrative data," FDZ Methodenreport 201006_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    31. Jennifer Hunt, 2006. "Staunching Emigration from East Germany: Age and the Determinants of Migration," Journal of the European Economic Association, MIT Press, vol. 4(5), pages 1014-1037, September.
    32. Minniti, Maria, 2005. "Entrepreneurship and network externalities," Journal of Economic Behavior & Organization, Elsevier, vol. 57(1), pages 1-27, May.
    33. André Stel & Kashifa Suddle, 2008. "The impact of new firm formation on regional development in the Netherlands," Small Business Economics, Springer, vol. 30(1), pages 31-47, January.
    34. Michael Fritsch & Florian Noseleit, 2013. "Indirect employment effects of new business formation across regions: The role of local market conditions," Papers in Regional Science, Wiley Blackwell, vol. 92(2), pages 361-382, June.
    35. Ewald Kibler & Teemu Kautonen & Matthias Fink, 2014. "Regional Social Legitimacy of Entrepreneurship: Implications for Entrepreneurial Intention and Start-up Behaviour," Regional Studies, Taylor & Francis Journals, vol. 48(6), pages 995-1015, June.
    36. Baumol, William J., 1996. "Entrepreneurship: Productive, unproductive, and destructive," Journal of Business Venturing, Elsevier, vol. 11(1), pages 3-22, January.
    37. Martin Andersson, 2015. "Start-up rates, entrepreneurship culture and the business cycle: Swedish patterns from national and regional data," Chapters, in: Charlie Karlsson & Urban Gråsjö & Sofia Wixe (ed.), Innovation and Entrepreneurship in the Global Economy, chapter 7, pages 162-183, Edward Elgar Publishing.
    38. Michael Stuetzer & Martin Obschonka & Udo Brixy & Rolf Sternberg & Uwe Cantner, 2014. "Regional characteristics, opportunity perception and entrepreneurial activities," Small Business Economics, Springer, vol. 42(2), pages 221-244, February.
    39. repec:use:tkiwps:332 is not listed on IDEAS
    40. Michael Anyadike-Danes & Mark Hart & Helena Lenihan, 2011. "New business formation in a rapidly growing economy: the Irish experience," Small Business Economics, Springer, vol. 36(4), pages 503-516, May.
    41. Michael Fritsch (ed.), 2011. "Handbook of Research on Entrepreneurship and Regional Development," Books, Edward Elgar Publishing, number 13399.
    42. 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.
    43. Vinod Sutaria & Donald A. Hicks, 2004. "New firm formation: Dynamics and determinants," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 38(2), pages 241-262, June.
    44. Michael Fritsch & Michael Wyrwich, 2014. "The Long Persistence of Regional Levels of Entrepreneurship: Germany, 1925-2005," Regional Studies, Taylor & Francis Journals, vol. 48(6), pages 955-973, June.
    45. Matthew S. Bothner, 2005. "Relative size and firm growth in the global computer industry," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 14(4), pages 617-638, August.
    46. Südekum, Jens, 2008. "Convergence of the skill composition across German regions," Regional Science and Urban Economics, Elsevier, vol. 38(2), pages 148-159, March.
    47. Stuart, Toby & Sorenson, Olav, 2003. "The geography of opportunity: spatial heterogeneity in founding rates and the performance of biotechnology firms," Research Policy, Elsevier, vol. 32(2), pages 229-253, February.
    48. repec:iab:iabfme:201006(en is not listed on IDEAS
    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. Holz, Michael & Levering, Britta & May-Strobl, Eva & Kasdorf, Alina, 2017. "Neue Ansätze für die Mittelstandspolitik: Impulse von internationalen Good-Practice-Beispielen," IfM-Materialien 262, Institut für Mittelstandsforschung (IfM) Bonn.
    2. Gloria Leonor Ortiz Morales & Juan Carlos Ramos Aguilar & Katherin Yineth Lozada Morales, 2022. "Culture as an obstacle for entrepreneurship," Journal of Innovation and Entrepreneurship, Springer, vol. 11(1), pages 1-14, December.
    3. Barinova, Vera (Баринова, Вера) & Zemtsov, Stepan (Земцов, Степан) & Tsareva, Yulia (Царева, Юлия), 2018. "Review of Empirical Studies of Factors of Entrepreneurial Activity [Обзор Эмпирических Исследований Факторов Предпринимательской Активности]," Working Papers 031830, Russian Presidential Academy of National Economy and Public Administration.
    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. 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.
    6. Michael Fritsch & Sandra Kublina, 2015. "Entrepreneurship,Growth, Regional Growth Regimes," Jena Economics Research Papers 2015-002, Friedrich-Schiller-University Jena.
    7. Kadri Arrak & Anneli Kaasa & Urmas Varblane, 2020. "Regional Cultural Context as a Determinant of Entrepreneurial Behaviour: The Case of Germany," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 29(1), pages 88-118, March.
    8. Martin Obschonka & Michael Stuetzer & Samuel D Gosling & Peter J Rentfrow & Michael E Lamb & Jeff Potter & David B Audretsch, 2015. "Entrepreneurial Regions: Do Macro-Psychological Cultural Characteristics of Regions Help Solve the “Knowledge Paradox” of Economics?," PLOS ONE, Public Library of Science, vol. 10(6), pages 1-21, June.
    9. Balázs Páger, 2014. "The entrepreneurial performance of the Central and Eastern European regions," ERSA conference papers ersa14p1631, European Regional Science Association.
    10. Obschonka, Martin & Stuetzer, Michael & Gosling, Samuel D. & Rentfrow, Peter J. & Lamb, Michael E. & Potter, Jeff & Audretsch, David B., 2015. "Entrepreneurial Regions: Do Macro-psychological Cultural Characteristics of Regions help solve the “Knowledge Paradox” of Economics?," MPRA Paper 65323, University Library of Munich, Germany.
    11. K. Bruns & N. Bosma & M. Sanders & M. Schramm, 2017. "Searching for the existence of entrepreneurial ecosystems: a regional cross-section growth regression approach," Small Business Economics, Springer, vol. 49(1), pages 31-54, June.
    12. Kathrin Bischoff, 2021. "A study on the perceived strength of sustainable entrepreneurial ecosystems on the dimensions of stakeholder theory and culture," Small Business Economics, Springer, vol. 56(3), pages 1121-1140, February.
    13. Xiaoyan Huang & Yuli Chen, 2021. "The Impact of Entrepreneurship on Economic Growth within a City," Businesses, MDPI, vol. 1(3), pages 1-9, October.
    14. Bijedić, Teita & Butkowski, Olivier K. & Kay, Rosemarie & Suprinovič, Olga, 2020. "Bestimmungsfaktoren des regionalen Gründungsgeschehens - eine Machbarkeitsstudie," IfM-Materialien 280, Institut für Mittelstandsforschung (IfM) Bonn.

    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 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.
    2. Michael Fritsch & Michael Wyrwich, 2015. "The Persistence of Regional Entrepreneurship - Are all types of Self-Employment Equally Important?," Jena Economics Research Papers 2015-008, Friedrich-Schiller-University Jena.
    3. Stuetzer, Michael & Obschonka, Martin & Audretsch, David B. & Wyrwich, Michael & Rentfrow, Peter J. & Coombes, Mike & Shaw-Taylor, Leigh & Satchell, Max, 2016. "Industry structure, entrepreneurship, and culture: An empirical analysis using historical coalfields," European Economic Review, Elsevier, vol. 86(C), pages 52-72.
    4. Michael Fritsch & Sandra Kublina, 2019. "Persistence and change of regional new business formation in the national league table," Journal of Evolutionary Economics, Springer, vol. 29(3), pages 891-917, July.
    5. 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.
    6. 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.
    7. Michael Fritsch & Sandra Kublina, 2015. "Entrepreneurship,Growth, Regional Growth Regimes," Jena Economics Research Papers 2015-002, Friedrich-Schiller-University Jena.
    8. Michael Wyrwich & Michael Stuetzer & Rolf Sternberg, 2016. "Entrepreneurial role models, fear of failure, and institutional approval of entrepreneurship: a tale of two regions," Small Business Economics, Springer, vol. 46(3), pages 467-492, March.
    9. Michael Fritsch & Michael Wyrwich, 2012. "The Long Persistence of Regional Entrepreneurship Culture: Germany 1925-2007," ERSA conference papers ersa12p63, European Regional Science Association.
    10. Niklas Elert, 2014. "What determines entry? Evidence from Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 55-92, August.
    11. 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.
    12. 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.
    13. Michael Stuetzer & David B. Audretsch & Martin Obschonka & Samuel D. Gosling & Peter J. Rentfrow & Jeff Potter, 2018. "Entrepreneurship culture, knowledge spillovers and the growth of regions," Regional Studies, Taylor & Francis Journals, vol. 52(5), pages 608-618, May.
    14. Michael Fritsch & Michael Wyrwich & Martin Obschonka, 2018. "Historical Roots of Entrepreneurial Culture and Innovation Activity - An Analysis for German Regions," Jena Economics Research Papers 2018-007, Friedrich-Schiller-University Jena.
    15. Obschonka, Martin & Stuetzer, Michael & Gosling, Samuel D. & Rentfrow, Peter J. & Lamb, Michael E. & Potter, Jeff & Audretsch, David B., 2015. "Entrepreneurial Regions: Do Macro-psychological Cultural Characteristics of Regions help solve the “Knowledge Paradox” of Economics?," MPRA Paper 65323, University Library of Munich, Germany.
    16. Martin Obschonka & Michael Stuetzer & Samuel D Gosling & Peter J Rentfrow & Michael E Lamb & Jeff Potter & David B Audretsch, 2015. "Entrepreneurial Regions: Do Macro-Psychological Cultural Characteristics of Regions Help Solve the “Knowledge Paradox” of Economics?," PLOS ONE, Public Library of Science, vol. 10(6), pages 1-21, June.
    17. Hans Westlund & Johan P. Larsson & Amy Rader Olsson, 2014. "Start-ups and Local Entrepreneurial Social Capital in the Municipalities of Sweden," Regional Studies, Taylor & Francis Journals, vol. 48(6), pages 974-994, June.
    18. Joan-Lluís Capelleras & Ignacio Contin-Pilart & Martin Larraza-Kintana & Victor Martin-Sanchez, 2019. "Entrepreneurs’ human capital and growth aspirations: the moderating role of regional entrepreneurial culture," Small Business Economics, Springer, vol. 52(1), pages 3-25, January.
    19. David Urbano & Sebastian Aparicio & Victor Querol, 2016. "Social progress orientation and innovative entrepreneurship: an international analysis," Journal of Evolutionary Economics, Springer, vol. 26(5), pages 1033-1066, December.
    20. 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.

    More about this item

    Keywords

    Entrepreneurship; economic development; self-employment; new business formation; entrepreneurship culture; institutions;
    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
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:egu:wpaper:1411. 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/deguunl.html .

    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.