What effect does the unemployment rate have on entrepreneurial activities in German regions—and are there differences between western and eastern Germany in this regard? This question is answered in an article recently published in the journal “Regional Studies” by Rolf Sternberg and Lennard Stolz from our Institute, and Christian Berkholz (Institute of Rural Economics, Johann Heinrich von Thünen Institute, Braunschweig) and Johannes Bersch (ZEW, Leibniz Institute for European Economic Research, Mannheim).
This article investigates regional variation in the unemployment push in Germany during economic upswings. Using a dataset of 1.2 million business formations in an eight-year period, the authors analyse regional variation in the urban–rural dichotomy and differentiate between regions in capitalist Western and those in the formerly socialist Eastern Germany
and account for regions’ economic situations. The intensity of the unemployment push increases with the level of rurality, and there is a stronger unemployment push in Western than in Eastern Germany. The latter can be attributed to differences in policy preferences regarding state reliance as tested by using voting patterns.
Christian Bergholz, Rolf Sternberg, Lennard Stolz & Johannes Bersch (2025): Unemployment as a driver of entrepreneurship in Eastern and Western Germany, Regional Studies, 59:1, 2511713, DOI: 10.1080/00343404.2025.2511713
