Jochen Streb

Technological and Geographical Knowledge Spillover in the German Empire 1877-1918

We use a newly developed data set of 39,343 high-value patents granted between 1877 and 1918 to demonstrate that technological progress during German industrialization occurred in at least four different technological waves. We distinguish the railway wave (1877-86), the dye wave (1887-96), the chemical wave (1897-1902), and the wave of electrical engineering (1903-18). Evidence is presented that inter-industry knowledge spillovers between technologically, economically, and geographically related industries were a major source for innovative activities during German industrialization. We also show that technological change affected the geographical distribution of innovative regions. Using an index of technologically revealed comparative advantage we find that regions that increased their innovativeness during the waves of technological progress revealed special strength in technological clusters like electrical engineering, mechanical engineering, or chemicals. Copyright Economic History Society 2006.

Shaping the national system of inter-industry knowledge exchange: Vertical integration, licensing and repeated knowledge transfer in the German plastics industry

We will claim in this paper that it was in particular the above-average propensity to share innovative information with customers and competitors which caused the exceptional international competitiveness of the West German plastics industry including chemical firms, plastics fabricators and machine makers. The system of knowledge exchange of this national cluster was shaped in two main steps. In the first half of the 20th century, cartellization and mergers were first tolerated and then even supported by the German government. It was in this period when German chemical firms formed the vertically integrated I.G. Farben concern which provided an optimal organisational framework to explore the new technological path of plastics. After the breaking up of I.G. Farben the firms of the West German chemical firms had to find new ways to maintain inter-industry technological co-operation in the second half of the 20th century. It turned out that they became aware of both contractual and non-contractual solutions of bundling standard good and information which were often placed somewhere between “market” and “hierarchy”. It seems to be no accident that all these different institutions did primarily encourage knowledge exchange between firms in geographical and cultural proximity. That is why the knowledge exchanging network of the plastics industry described in this paper has been in particular concentrated on German firms. Even so the question is still open whether this localisation is just a curiosity limited to a special industry cluster or part of a broader German system of knowledge exchange.

Moral Hazard in a Mutual Health Insurance System: German Knappschaften, 1867–1914

This paper studies moral hazard in a sickness-insurance fund that provided the model for social-insurance schemes around the world. The German Knappschaften were formed in the medieval period to provide sickness, accident, and death benefits for miners. By the mid-nineteenth century, participation in the Knappschaft was compulsory for workers in mines and related occupations, and the range and generosity of benefits had expanded considerably. Each Knappschaft was locally controlled and self-funded, and their admirers saw in them the ability to use local knowledge and good incentives to deliver benefits at low costs. The Knappschaft underlies Bismarcks sickness and accident insurance legislation (1883 and 1884), which in turn forms the basis of the German social-insurance system today and, indirectly, many social-insurance systems around the world. This paper focuses on a problem central to any insurance system, and one that plagued the Knappschaften as they grew larger in the later nineteenth century: the problem of moral hazard. Replacement pay for sick miners made it attractive, on the margin, for miners to invent or exaggerate conditions that made it impossible for them to work. Here we outline the moral hazard problem the Knappschaften faced as well as the internal mechanisms they devised to control it. We then use econometric models to demonstrate that those mechanisms were at best imperfect.

Technological Creativity and Cheap Labour? Explaining the Growing International Competitiveness of German Mechanical Engineering before World War I

Abstract Which factors caused the growing international competitiveness of German mechanical engineering industry in the pre-World War I period? In this paper, we want to address this question and elucidate whether or not the international market success of machine builders in the German Empire was determined by technological creativity and the availability of a comparatively cheap labour force. Based on an unbalanced panel, we therefore investigate the influence of demand, labour costs and technological creativity on export performance of 32 different machinery types. We find robust evidence that the development of export- import ratios in mechanical engineering was positively influenced by the growth of patent stocks that represent the new knowledge being available for German machine builders. In addition, we present some evidence for the assumption that the growing international competitiveness of German mechanical engineering was also caused by decreasing relative unit labour cost.

Fixed-price contracts, learning, and outsourcing: explaining the continuous growth of output and labour productivity in the German aircraft industry during the Second World War1

In this article it is claimed that, at least in the aircraft industry, the development of German armament production and productivity was much more continuous than Wagenfuhrs armament index and both the Blitzkrieg thesis and the inefficiency thesis suggest. In order to prove this new thesis of continuity, we show on the basis of firm-level data, firstly, that investment in production capacities had already started before the war and was especially high in the early phase of the war, and secondly, that the regulatory setting of aircraft production management was rather constant and was not dramatically changed after 1941. In addition, we demonstrate that the driving forces of productivity growth were primarily learning-by-doing and outsourcing, the latter being generally neglected by economic historians.

Supplier networks in the German aircraft industry during World War II and their long-term effects on West Germany's automobile industry during the ‘Wirtschaftswunder’

Reconstructing the complex supplier network of the famous JU 88 air armament programme, this article shows that outsourcing activities increased considerably in wartime Germany. The resulting inter-firm division of labour did not lead only to a quite effective protection of the German aircraft production against Allied air raids but also contributed to enormous labour productivity growth in most stages of the production process. Even though aircraft production was prohibited in post-war Germany, this supplier network survived and became the backbone of the most spectacular symbol of West Germanys economic rebirth: the automobile industry.

Die verlorene Erzeugungsschlacht: Die nationalsozialistische Landwirtschaft im Systemvergleich

Abstract To evaluate the achievements and failures of National Socialists’ agrarian policy we compute and compare average annual growth rates of value added, factor inputs and total factor productivity of German agriculture for the three periods 1925-1929/32 (Weimar Republic), 1933-1938 (Third Reich), and 1950-1959 (Federal Republic of Germany). This long-term quantitative analysis shows that National Socialists′ agrarian policy considerably slowed down modernization by decreasing growth rates of both technical progress and mechanization.

Foreign Patenting in Germany, 1877-1932

In this paper, we use both patents’ individual life span and foreign patenting activities in Germany to identify the most valuable patents of the 21 most innovative countries (except for Germany) from the European Core, the European periphery and overseas between 1877 and 1932. Our empirical analysis reveals that important characteristics of the international distribution of foreign patents are time-invariant. In particular, the distribution of foreign patents across countries in the late nineteenth and early twentieth centuries was as highly skewed as it was in the late twentieth century – and even dominated by the same major research economies. Our analysis suggests that firms’ technological advantages were influenced both by exogenous local factors, such as the countries’ resource endowment, and by endogenous factors, such as the national education and research system or the countries’ actual stage of economic development.

The mirage of the German armament miracle in World War II

Based on a revision of output and labor productivity series of the German armament industry during the World War II we show that the so-called German armament miracle was only a statistical construct produced by the manipulation of Albert Speer and his statisticians. In particular, we find no structural break in the year 1942 when Speer became armament minister. In a period of continuous expansion, only the year 1941 stands out, when both domestic armament production and labor productivity decreased. We suggest that this temporary slump was caused by the short-term effects of outsourcing activities and capital deepening.

Historical Economics of Wars in the 20th Century

Abstract To stimulate projects on the historical economics of wars in the 20th century we advocate three promising research strategies by reviewing recent studies that focus on international or inter-temporal comparisons and on the economic and social consequences of war.