The Historical Effects of the Regional Entrepreneurial Activity

The entrepreneurial activity might be significantly heterogeneous at the regional level. Cases of economies, which have not been socialistic in the past, demonstrate that spatial differences in entrepreneurship are persistent over time. However, it is still unclear whether such historical effects exist in emerging economies. This study investigates the relationship between entrepreneurial activity in regions of Russia in the late 1980s and the current level of regional entrepreneurship. In order to measure the entrepreneurial activity in Russia we use shares of self-employed in the labor force of a region. This indicator might be a more accurate measure than the traditional one based on the number of small and medium enterprises. In this study we test whether current spatial differences in entrepreneurship might be explained by the official or shadow entrepreneurial activity in the late 1980s. Our findings show that regions with high entrepreneurial activity in a shadow and official sector of Russian economy now demonstrate a high level of self-employment rates. Thus, the entrepreneurial activity has a long-term impact on the self-employment despite to the significant changes.