Entrepreneurship and Post‐socialist Growth*

Abstract We use a rich regional data set to obtain a statistical characterization of the relationship between entrepreneurial activity and economic growth within post‐Soviet Russia. Russia is a useful laboratory for evaluating links between entrepreneurial activity and growth because of the striking variation in initial conditions, the adoption of policy reforms, and entrepreneurial activity observed across its large number of regions in the early stages of transition. Russia has also experienced striking regional variation in subsequent growth. Conditional on variations in initial conditions and policy reform measures, regional entrepreneurial activity exhibits a statistically and quantitatively significant relationship with subsequent economic growth.