Entrepreneurship and Post‐socialist Growth*

Abstract

We use a rich regional data set to obtain a statistical characterization of the relationship between entrepreneurial activity and economic growth within post-Soviet Russia. Russia is a useful laboratory for evaluating links between entrepreneurial activity and growth because of the striking variation in initial conditions, the adoption of policy reforms, and entrepreneurial activity observed across its large number of regions in the early stages of transition. Russia has also experienced striking regional variation in subsequent growth. Conditional on variations in initial conditions and policy reform measures, regional entrepreneurial activity exhibits a statistically and quantitatively significant relationship with subsequent economic growth.

Entrepreneurship and the evolution of income distributions in Poland and Russia

“…Finding consistent evidence for these two countries having two quite different transition experiences lends credibility to the proposition that new firm creation leads to a more equitable distribution of income in post-socialist countries. In addition, Berkowitz and DeJong (2005) find that a onestandard-deviation increase in the size of the small firm sector is associated with a one and a half percent increase in annual income growth from 1993 to 2000 in Russia. In a similar analysis for Poland, we find that each measure of de novo firm activity used in this paper is significantly related to income growth with a one-standard-deviation increase associated with a one percent higher annual income growth rate.…”

How transition paths differ: Enterprise performance in Russia and China

“…(4) substituting for the regional dummy variables with variables that capture the characteristics of the regions. Specifically, we used the Berkowitz and DeJong (2005) variables capturing inter-regional economic and institutional differences in Russia. 14 We also estimated specifications in which sectoral relative prices were used instead of industry dummies, but these regressions were found to be inferior in terms of goodness of fit and are therefore not reported.…”

Freedom, barriers to entry, entrepreneurship, and economic progress

“…Ovaska and Sobel (2005) find that differing rates of entrepreneurship explain the divergent economic paths followed by the former Soviet republics. Berkowitz and DeJong (2005) find a strong relationship between economic growth within a country over time and the rate of entrepreneurial activity within that country. Kreft and Sobel (2005) find this relationship to be true across U.S. states, and Henderson (2002) finds it to hold at the local level within the United States.…”