Using a large administrative dataset for Germany, this paper compares employment developments in exiting and surviving establishments. For both West and East Germany we find a clear “shadow of death” effect reflecting lingering illness: establishments shrink dramatically already several...

Using a large administrative dataset and methods of survival analysis, I analyze for the period 1994-2008 whether new establishments’ survival chances differ between East and West Germany and whether they converged over time. I find that new establishments in East Germany had relatively good...