Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/245379 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9198
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Can culture explain persistent differences in economic activity among individuals and across regions? A novel measure of cultural origin enables us to contrast the entrepreneurial activity of individuals located in the same municipality but whose ancestors lived just on opposite sides of the Swiss language border in the 18th century. Individuals with ancestry from the German-speaking side create 20% more firms than those with ancestry from the French-speaking side. These differences persist over generations and independent of the predominant culture at the current location. Yet, founders' ancestry does not affect exit or growth of newly-founded firms. A model of entrepreneurial choice and complementary survey evidence suggest that the empirical patterns are mainly explained by differences in preferences, rather than skill. The results have sizable economic implications, accounting for 120,000 additional jobs over a period of 15 years.
Subjects: 
culture
entrepreneurship
natural experiment
spatial RDD
JEL: 
D22
L26
O12
Z10
Document Type: 
Working Paper
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