The Fragmented Nature of the East German Economy

Author: Michael Arnold, Alexander Eickelpasch, Michael Fritsch, Anselm Mattes, Alexander Schiersch
Published: August 2015

DIW Weekly Report 82 (2015), 35, S. 764-772 (Language: German)

In the 25 years since the reunification, the East German economy still has not caught up to the West German economy. In 2013, the per capita economic performance in the East German states was only 70 percent of that in the West German states — and, due to low growth momentum, the East German economy will not catch up to the West German economy in the short- or medium-term. One explanatory factor is the fragmented nature of the East German economy. Notably, East Germany lacks large companies and more importantly, it lacks corporate headquarters. Instead, the East German economy is dominated by small and medium-sized companies. This Wochenbericht shows that in addition the East German companies’ differing innovation and export behavior, the personality traits of the businessmen themselves play an important role in this development.

Publication Tags:
East Germany, firm growth, firm size, regional economics

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