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Katharina Erhardt, Simon Haenni, The Cultural Roots of Firm Entry, Exit and Growth, The Economic Journal, Volume 132, Issue 648, November 2022, Pages 2767–2814, https://doi.org/10.1093/ej/ueac029
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Abstract
Can culture explain persistent differences in economic activity among individuals and across regions? A novel measure of cultural origin enables us to contrast entrepreneurial activity of individuals located in the same municipality, but whose ancestors lived just on opposite sides of the Swiss language border in the eighteenth century. Individuals with ancestry from the German-speaking side create 20% more firms than those with ancestry from the French-speaking side. These differences persist over generations and independent of the predominant culture at the current location. Yet, founder’s ancestry does not affect exit or growth of newly founded firms, suggesting that preferences are pivotal.