Haifeng Qian (p)

Jan Wedemeier

see extended abstract

Ingrid (p), Budy Resosudarmo

Haifeng Qian

This paper examines the long-term economic impacts of an historically salient place-based policy in Java. Colonial Java was one of the world’s triumphs for sugar production once the Dutch-forced cultivation system came into effect in the early nineteenth century. The Dutch then built exhaustive railroad networks across the island to particularly boost surplus extraction from the sugar commodity. We make progress by exploiting the Dutch quasi-random experiment stemming from the haphazard formation of cultivation system sugar factories to circumvent the potentially endogenous placement of railroads. Utilizing our new assembled dataset, we document that railroad locations remain to thrive today: they are more urbanized, more engaged in entrepreneurship and innovation, and wealthier although railroads have demised. The enduring effects are consistent with the pattern of path dependence owing to the durability of colonial sunk investments which automatically coordinates the allocation of present-day infrastructure investments, and human capital accumulation.

Majunath Agalagurki Nagaraj (p), Suresh Bhagavathula, K Kumar

Inggrid

See Extended Abstract Also.

The interest of this paper is to highlight the role of reputation in nurturing the historical roots of regional entrepreneurship. While scholars of regional entrepreneurship have traditionally focused on economic capital, institutional environment, and supportive infrastructure, social capital in terms of regional knowledge, creativity, social networks and culture have been gaining attention in the recent years. We contribute to this literature by highlighting how historical narratives and imaginations of a region are employed to build its reputation as a hotbed of entrepreneurial activity. To this end, we build on Burt’s idea of reputation as arising not from what we do but from what people talk about what we do. We use the historical case of the region of Mysore in colonial India which came to be called ‘Industrial Mysore’ and whose legacy is still quoted as a precursor of the current entrepreneurial ecosystem of Bangalore in India. This case illustrates how narratives and imaginations were creatively employed in building the reputation of the Mysore region as entrepreneurial and how that reputation led to the emergence of entrepreneurial activity in the region. We argue that ‘reputational entrepreneurship’ is an essential element in understanding regional entrepreneurship. While there is a large literature on organizational reputation and emerging literature on new venture reputation, we urge scholars in regional entrepreneurship to explore the dialectic between reputation of regions and entrepreneurship in those regions. Such an understanding can help system level actors like policy makers, regional leaders, trade associations etc to focus on building reputation as a social capital that can complement economic capital.

Jan Wedemeier (p)

Manjunath Agalagurki Nagaraj

There are some approaches to discuss the role of historical path dependency, innovation institutions, and economics development. For instance, Ville (2011) analyzes historical approaches to creativity and innovation in the case of Australia. He concludes on the relevance of frameworks for innovation and historical events. Fritsch et al. (2018) elaborate the understanding of the role of entrepreneurial culture and start-up behavior. They combine historical self-employment data (entrepreneurial tradition) with different variables related to entrepreneurial attitudes. Their results show that entrepreneurship is positively related also to the level innovation (activity).

However, in the European Union, the so-called smart specialization plays a special role. Smart specialization and its strategic development were introduced from 2005 by an EU-high expert group to find an innovation policy instrument to close Europe's productivity and innovation capability gap with the US and Japan. The so-called Smart Specialization Strategy (S3) builds on the theory of innovation economics and was introduced as a European policy approach as "Research and Innovation Strategies for Smart Specialization" (RIS3). Moreover, against the background of the national innovation models, but also the regional innovation systems (RIS), in connection with cluster strategies, the smart specialization approach is highly relevant (Asheim et al., 2011; McCann & Soete, 2020).

The approach chosen here first examines the national innovation systems of the Eastern European economies in the context of the political framework. First, a review of the literature should also present the current state of research. The national innovation systems of the Eastern European member states of the EU and their neighboring countries are to be examined. Derived from the literature, second, a current model (growth model) is presented, which represents the basis for the creation of the empirical-econometric analysis. For the purpose of the analysis, third, variables such as R&D, patents, human capital, creativity are taken into account, but also variables of the political system such as openness, corruption and freedom of the press are used to control for the individual peculiarities of the states. The economic development is derived from this system of variables in order to determine various transformation paths. Based on the analysis, the suspected different development paths can then be derived.