Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/150918
Authors: 
Runst, Petrik
Year of Publication: 
2011
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research 373
Abstract: 
In this paper it is argued that locus of control beliefs and preferences concerning state action negatively affect the formation of new firms in former socialist countries. For this purpose Kirzner's theory of costless entrepreneurship is reviewed and criticized. German reunification, in which the formerly Socialist East joined the Federal Republic of Germany, represents an intriguing natural experiment in which the formal institutional structure of one nation was almost fully transplanted into another. Traditional as well as psychological factors are examined. The results suggest that about one third of the east-west gap in new self-employment can be explained by inert informal institutions.
Subjects: 
Psychology of Entrepreneurship
Self-Employment
Transitional Economies
East Germany
JEL: 
D0
J24
O12
P20
Document Type: 
Working Paper

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