Dynamism and employment development of eastern German enterprises 1991 - 1995

Abstract

"The transformation process in the new Federal states is often subdivided into a 'transformation from above' (the splitting up of the old enterprises) and a 'transformation from below' (establishment of new enterprises). In this article these two partial processes are considered both with regard to their influence on the restructuring of the business landscape as well as with regard to their employment effects. It emerges that new jobs have been created almost solely by new enterprises, whereas in ex-Treuhand enterprises jobs have so far only been cut. Although the number of new enterprises being established declines over the period of the study, it is still at a high level. There is a stronger decline in the number of new enterprises being established in the manufacturing industry than the overall development, the rate of establishment in the manufacturing industry has, in contrast to other sectors, already almost reached the level in western Germany. If this development is not compensated by above-average survival and growth rates in the future, it will be difficult to continue the building up of an industrial basis in eastern Germany. On the whole, if the survival rate is taken as an indicator for the success of the newly set up enterprises, the position of the new enterprises in the new Federal states has been rather favourable. Although the number of insolvencies increases over the period of the study, it is not excessive compared with the western German value. In the second part of the paper the net development of employment is broken down into its gross streams. Here it can be seen that the relative reduction has been roughly the same in all fields of industry, but in contrast to the manufacturing sector, in the construction industry and the tertiary sector this loss is counterbalanced by an increase in the number of new jobs which is at least the same level. The collapse of employment in eastern Germany is therefore mainly a problem of a lack of growth in the manufacturing industry, which in turn can be put down to the relatively low activity in setting up new enterprises." (Author's abstract, IAB-Doku) ((en))

Cite article

Lehmann, U. (1996): Dynamik und Beschäftigungsentwicklung der ostdeutschen Betriebe 1991-1995. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 29, No. 4, p. 580-588.