Determinants of Entrepreneurship in Germany

Posted: 24 Nov 2009

See all articles by I. Verheul

I. Verheul

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus Research Institute of Management (ERIM)

gabriel leonardo

affiliation not provided to SSRN

Stephan Schuller

APG Asset Management

Judith van Spronsen

affiliation not provided to SSRN

Date Written: 2002

Abstract

The degree to which Germany can be calledentrepreneurial is investigated, as well as the institutions, policies, andcultural factors that have influenced the development ofentrepreneurship.Until the advent of globalization in the 1990s, Germanyachieved impressive levels of economic performance and social harmony with itsSocial Market Economy. Organized around small- and medium-sized enterprises (SMEs), many of whichwere family-owned, the Social Market Economy was designed to provide stabilityand to preserve the status quo.Financial institutions maintained closeties with traditional industries, perpetuating the reluctance to admit newfirms and industries to the economy.By the end of the 1990s, unemploymentand stagnation made it clear that the traditional policy approach, so effectivein the post-war era, was no longer practical. Observing the success that their Dutch neighbors enjoyed following theimplementation of policies fostering entrepreneurship, German policy-makersbegan to focus on entrepreneurship, particularly in knowledge-basedindustries.Having started the process of deregulation and privatization,the government offered tax reductions to small businesses and introducedprograms to stimulate the growth of new enterprises. These policies, along withthe recent development of the German venture capital market, are laying thegroundwork for a powerful core of knowledge-based entrepreneurialfirms.Clearly, government intervention has been integral to thedevelopment of entrepreneurship in Germany.(SAA)

Keywords: Knowledge, Knowledge-based firms, Social market economies, Public policies, Deregulation, Privatization, Taxes, Economic transitions

Suggested Citation

Verheul, Ingrid and leonardo, gabriel and Schuller, Stephan and van Spronsen, Judith, Determinants of Entrepreneurship in Germany (2002). Entrepreneurship: Determinants and Policy in a European-US Comparison, Vol. 27, p. 163-207 2002. Available at SSRN: https://ssrn.com/abstract=1511556

Ingrid Verheul (Contact Author)

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

Burgemeester Oudlaan 50
3062 PA Rotterdam, NL 3062 PA
Netherlands
+31 10 4081398 (Phone)
+31 10 4089146 (Fax)

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Gabriel Leonardo

affiliation not provided to SSRN

Stephan Schuller

APG Asset Management ( email )

Schiphol Boulevard 239
1118 BH Schiphol
Netherlands

Judith Van Spronsen

affiliation not provided to SSRN

No Address Available

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