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• W2890847066 abstract "We use the fall of the Berlin Wall in 1989 to show that personal relationships which individuals maintain for non-economic reasons can be an important determinant of regional economic growth. We show that West German households who have social ties to East Germany in 1989 experience a persistent rise in their personal incomes after the fall of the Berlin Wall. Moreover, the presence of these households significantly affects economic performance at the regional level: it increases the returns to entrepreneurial activity, the share of households who become entrepreneurs, and the likelihood that firms based within a given West German region invest in East Germany. As a result, West German regions which (for idiosyncratic reasons) have a high concentration of households with social ties to the East exhibit substantially higher growth in income per capita in the early 1990s. A one standard deviation rise in the share of households with social ties to East Germany in 1989 is associated with a 4.7 percentage point rise in income per capita over six years. We interpret our findings as evidence of a causal link between social ties and regional economic development." @default.
• W2890847066 created "2018-09-27" @default.
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• W2890847066 date "2011-01-01" @default.
• W2890847066 modified "2023-10-16" @default.
• W2890847066 title "The Economic Impact of Social Ties: Evidence from German Reunification" @default.
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• W2890847066 doi "https://doi.org/10.2139/ssrn.1955814" @default.
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