Post-Socialist Culture and Entrepreneurship

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.Psychology of Entrepreneurship, Self-Employment, Transitional Economies, East Germany

Personality traits and the likelihood of self-employment: a journey into the crafts' way of doing business

Given the renewed scholarly interest in the crafts, this paper explores the nuances of crafts entrepreneurship through a personality-based approach. Our findings validate prior research on the general influence of broad and narrow personality traits on self-employment. However, our analysis also suggests that certain effects differ between crafts and non-crafts, most notably the role of the Big Five trait of conscientiousness – suggesting that there is something ‘unique’ about the crafts’ way of doing business that goes beyond firm size. In this way, we provide evidence that personality may affect self-employment differently depending on the sector or field of entrepreneurship

Colorful map, colorful elections? Right-wing voting preferences beyond East and West

Der scharfe Ost-West-Unterschied, welcher in der kartografischen Darstellung regionaler Wahlergebnisse zum Vorschein tritt, verändert sich deutlich, sobald man regionalspezifische Charakteristika berücksichtigt. Die höhere Präferenz für die AfD ist nach Berücksichtigung der Merkmale weniger ost-west-scharf. Stattdessen finden wir regionale Muster, in denen auch bestimmte Regionen im südlichen Deutschland einen erhöhten AfD-Anteil an der Wählerschaft aufweisen. Dennoch besteht im Osten weiterhin eine stärkere Präferenz für die AfD als in den anderen Landesteilen. Der verbleibende Unterschied kann als Differenz kulturell geprägter Werte interpretiert werden, aufgrund derer aktuelle Ereignisse, wie der Ukrainekrieg und die Migration, verschieden wahrgenommen und bewertet werden.The sharp East-West difference that emerges in the cartographic representation of regional election results changes significantly once regional-specific characteristics are controlled for. The higher preference for the right-wing party AfD becomes less sharply delineated between East and West after accounting for these factors. Instead, we find patterns where certain regions in southern Germany display an increased share of AfD supporters. Nonetheless, there remains a stronger preference for the AfD in the East compared to other parts of the country. The remaining difference can be interpreted as a divergence in culturally influenced values

Firm innovation and generalized trust as a regional resource

Generalized trust represents an important regional resource for a firm. It increases human capital, fosters frequent interaction and information sharing, and lowers transaction costs. We provide empirical evidence on the impact of generalized trust among people on firm innovation in German regions. Our observation period ranges from 2004 to 2018. A trust measure is generated by using survey data from the German Socio-Economic Panel, firm-level data is obtained from the Mannheim Innovation Panel and regional data is retrieved from the INKAR database. We apply a 3-level multilevel model, with yearly observations nested in firms, which are nested in regions. Our results show that the relationship between trust and firm innovation has an inverted U-shape. An increase in trust is particularly beneficial for firms inside regions with very low levels of trust, and in small and medium-sized enterprises, especially those that operate in the doing-using-interacting mode of innovation (DUI) with an emphasis on employee freedom and creativity

Post-Socialist Culture and Entrepreneurship

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

Mind, Society & Entrepreneurial Action

The first chapter ‘De Gustibus Est Disputandum’ theoretically examines the problem of infinite regress in the analysis of human action. An agent’s action is dependent on other people’s action, which in turn, is affected by a third set of actors, and so on. This irreducible complexity leads to a variety of approaches. It is argued that behavioral move in economics is needed in order to explain how agents evaluate the (humanly imposed) constraints. As individuals’ actions are influenced by their ideas, the web of institutional constraints will be affected if there is a shift in ideas. This requires a study of how the emergence of intersubjectively shared ideas can be brought about by human interaction. The next chapter ‘Short Run Bias & Long Run Rationality’ contains the applied hypotheses that an absence of hierarchical constraints will lead to higher beliefs of internal Locus of Control, and lower preferences for state intervention. It is shown how different groups in east Germany subject to varying degrees of hierarchically imposed vii vii constraints display a different pace of belief and preference adjustment after the reunification of the country. Finally, the chapter ‘Post-socialist Culture & Entrepreneurship’ shows empirically how cultural beliefs and preferences that emerged under a prolonged period of socialism can affect economic behavior. At least one third of the gap in self-employment between east and west Germany can be attributed to this effect, after competing explanations, such as credit constraints, education, and adverse selection are accounted for

Kurswechsel in der deutschen Klimapolitik am Beispiel der energetischen Gebäudesanierung

Um CO2-Emissionen zu vermeiden, schreibt der Gesetzgeber in Deutschland häufig direkte, ganz konkrete Eingriffe vor. Im Bereich der energetischen Gebäudesanierung wird im Detail festgelegt, wo und wie eingespart werden soll. Es liegt auf der Hand, dass mit so engen Vorgaben eine effi ziente Lösung häufig nicht erzielt werden kann. Der Autor plädiert für ein Umdenken in der deutschen Klimapolitik.Direct policy interventions with regard to building energy efficiency are necessarily abstract and therefore not always flexible enough to suit individual living conditions. They disregard local knowledge and cannot benefit from a decentralized search process which would ensue under a taxation scheme. Detailed central decision making is also vulnerable to lobbying by interest groups. The interview results presented here support the high costs and lacking fl exibility of current retrofi t guidelines. One theoretical as well as three actual retrofi t scenarios suggest that the costs of CO2-reduction under the current policy scheme lie between 300 and 1,000 Euro/ton. Indirect policy schemes are associated with abatement costs of 30 to 200 Euros per ton

Bedeutung von Migranten als Auszubildende, Fachkräfte, Meister und Selbstständige im Handwerk

Handwerkliche Tätigkeiten haben eine integrative Funktion. Die Kombination von niedrigeren schulischen Einstiegsbarrieren und Möglichkeiten der Weiterqualifikation kann die Arbeitsmarktintegration von Migranten unterstützen. Migranten arbeiten überproportional häufig in Handwerksberufen. Außerdem ist der Anteil von ausländischen Lehrlingen im Handwerk größer als der Ausländeranteil in nicht-handwerklichen Ausbildungsberufen. Die vorliegende Untersuchung zeigt auch, dass Arbeitsmarktintegration ein langfristiges Projekt ist. Es vergeht ca. eine Dekade ab dem Zeitpunkt der Ankunft, bis sich der Anteil einer Einwanderungskohorte, die im Handwerk arbeiten, an den Anteil der Deutschen im Handwerk anpasst. Längerfristig übersteigt der Handwerkeranteil unter Einwanderern aber den Handwerkeranteil unter Nicht-Migranten. Das Qualifikationsniveau von Migranten weist starke Defizite auf und stellt ein zentrales politisches Handlungsfeld dar, um eine erfolgreiche gesellschaftliche und berufliche Eingliederung zu befördern. Es gilt, innovative Wege zu finden, das standardisierte System des Übergangs vom Realschulabschluss zur Berufsausbildung, welches in der Abwesenheit von hoher Zuwanderung funktional war, partiell zu umgehen, dabei aber weiterhin eine gute Ausbildungsqualität zu gewährleisten. Fachkräfteknappheit kann nur in begrenztem Maße durch Migration ausgeglichen werden. Die jungen ausländischen Auszubildenden sind zwar häufig in handwerklichen Engpassberufen anzutreffen. Langfristig dürfte die Zahl der eingewanderten Personen aber nicht ausreichen, um die niedrige deutsche Geburtenrate zu kompensieren. Außerdem verfügt ein Großteil der Migranten nicht über einen Berufsabschluss. Die Einwanderer der ersten Generation arbeiten häufig als An- und Ungelernte in niedrigqualifizierten Berufen, bei denen keine erhöhte Fachkräfteknappheit vorliegt. Durch die Deregulierung der beruflichen Zugangsbeschränkung im Jahre 2004 wurde die Meisterpflicht für Unternehmer in einer Reihe von Gewerken abgeschafft. Diese Gesetzesänderung verursachte eine Erhöhung des Anteils von Personen mit ausländischer Herkunft im B1-Handwerk. Die Erhöhung des Migrantenanteils ist besonders stark ausgeprägt unter Selbstständigen. Es gibt aber auch Hinweise auf eine nennenswerte Erhöhung des Migrantenanteils unter abhängig Beschäftigten.The Crafts Sector plays a key role for the successful integration of immigrants into the German labor market. The combination of low educational entry barriers and the possibility of continuing qualification could represent an attractive option for immigrants with lower levels of qualification. The share of migrants who work in the crafts sector is larger than the share of Germans who works as craftsmen. Similarly, the share of foreign apprentices in the crafts is higher than the share of foreign apprentices in other branches of the economy. This study shows that labor market integration is a long term process. It takes at least one decade after arrival until the share of an immigrant cohort that works in the crafts sector is equal to the one among native born Germans. After that time period however, immigrants are more likely to work in the crafts sector than natives. The qualification level of immigrants is below the one of native born individuals and the catch-up process is slow. The re-design of qualification pathways in order to allow individuals without school degrees to enter vocational training, without jeopardizing the quality of training, appears to be the most pressing political task. The increasing scarcity of mid-level qualified labor will hardly be affected by immigration despite the fact that many immigrants undergo training in occupations characterized by increased levels of labor scarcity. First, there are many immigrants without formal training who mostly work in low level occupations. Second, the sheer quantity of immigrants does not suffice to compensate for the low birth rate in Germany. Finally, the deregulation of the German trades and Crafts code of 2004 has caused a rise in the share of foreign born entrepreneurs in the crafts sector. There is also some evidence for an increase in the share of foreign born employees

A case study of bureaucratic discretion: heterogeneous application of market entry regulation in Germany

Abstract All law is relatively coarse after its initial implementation as the legislature cannot foresee all contingencies that can arise in the actual application of the law. Therefore, decisions need to be made by street-level administrators as novel and particular circumstances arise. Economists have largely ignored the political science literature on street-level bureaucrats, such as policemen, welfare case managers, or regulatory agents. I present a case study in the context of market entry regulation in Germany. Qualitative and quantitative evidence suggests that bureaucratic discretion exists, that is, administrative actions can be found on different ends of a decision space, and that its effects are potentially large. Administrators do not apply legislation in a uniform manner and we observe a systematically different application of rules across subnational jurisdictions.Abstract All law is relatively coarse after its initial implementation as the legislature cannot foresee all contingencies that can arise in the actual application of the law. Therefore, decisions need to be made by street-level administrators as novel and particular circumstances arise. Economists have largely ignored the political science literature on street-level bureaucrats, such as policemen, welfare case managers, or regulatory agents. I present a case study in the context of market entry regulation in Germany. Qualitative and quantitative evidence suggests that bureaucratic discretion exists, that is, administrative actions can be found on different ends of a decision space, and that its effects are potentially large. Administrators do not apply legislation in a uniform manner and we observe a systematically different application of rules across subnational jurisdictions