Historical Shocks and Persistence of Economic Activity: Evidence from a Unique Natural Experiment
42 Pages Posted: 14 Jul 2016
Date Written: July 14, 2016
This paper investigates the persistence of entrepreneurship in the region of Kaliningrad between 1925 and 2010. During this time period the area experienced a number of extremely disruptive shocks including; devastation caused by World War II, a nearly complete replacement of the native German population by Soviets, and 45 years under an anti-entrepreneurial socialist economic regime followed by a shock-type transition to a market economy. Nevertheless, we find a surprisingly high level of persistence of industry-specific self-employment rates in the districts of the Kaliningrad region. Our analysis suggests that persistence of entrepreneurship is higher in regions with a history of successful entrepreneurship. That is, in regions where a specific industry was particularly efficient and entrepreneurial activity was especially pronounced.
Keywords: Entrepreneurship, regional culture, persistence
JEL Classification: L26, N94, P25, P5
Suggested Citation: Suggested Citation