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Former Communist party membership and present-day entrepreneurship

Ivlevs, Artjoms; Nikolova, Milena; Popova, Olga

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Authors

Milena Nikolova

Olga Popova



Abstract

After the collapse of communism in Central and Eastern Europe, former party members were particularly likely to start businesses and become entrepreneurs. What remains unclear, however, is whether this entrepreneurial activity was driven by the resources, information, and opportunities provided by former party membership or because individuals with specific individual attributes were more likely to become Communist cadres (self-selection). This study is the first to separate the causal effect of former Communist party membership from self-selection. Using individual-level Life in Transition–III survey and a control function approach, we find that former Communist party membership has facilitated business set-up but not business longevity in Central and Eastern European countries. We also show that people who joined the former ruling party had fewer of the traits associated with entrepreneurship such as unobservable personality traits, ability, motivation, and entrepreneurial aptitude, and as such were negatively self-selected. We show that former Communist party membership still matters for business practices, business ethics, and the nature of doing business in transition economies.

Citation

Ivlevs, A., Nikolova, M., & Popova, O. (2021). Former Communist party membership and present-day entrepreneurship. Small Business Economics, 57, 1783–1800. https://doi.org/10.1007/s11187-020-00364-6

Journal Article Type Article
Acceptance Date May 15, 2020
Online Publication Date Jun 25, 2020
Publication Date 2021-12
Deposit Date May 11, 2020
Publicly Available Date Dec 2, 2021
Journal Small Business Economics
Print ISSN 0921-898X
Electronic ISSN 1573-0913
Publisher Springer Verlag
Peer Reviewed Peer Reviewed
Volume 57
Pages 1783–1800
DOI https://doi.org/10.1007/s11187-020-00364-6
Keywords Entrepreneurship; Communist party; Elite networks; Post-socialist countries; Central and Eastern Europe
Public URL https://uwe-repository.worktribe.com/output/5972834

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