The East German economy is too fragmented
DIW Weekly Report 82 (2015), 35, pp. 764-772
Almost 25 years after reunification, the East German economy has not yet caught up with the West German economy. Compared to West Germany, the per capita economic output of the East German Länder reached only slightly more than 70 per cent in 2013. Even in the short or medium term, the new federal states will not catch up with the west German level because their growth dynamics are too low.
One of the reasons for this is the small-scale nature of the East German economy. In particular, East Germany lacks large companies and especially corporate and group headquarters. Instead, the East German economy is dominated by small and medium-sized enterprises. This weekly report shows that in addition to deviating innovation and export behaviour of East German companies, the personality traits of entrepreneurs also play an essential role in this development.PDF Download of this publication