A New View on Technology and Productivity in German Manufacturing in the Early Twentieth Century

ABSTRACT: Labor productivity in German manufacturing lagged persistently behind the United States in the early twentieth century. Traditionally, this is attributed to dichotomous technology paths across the Atlantic. However, various industry case studies suggest rapid diffusion of U.S. technologies in Germany. We develop a novel decomposition framework based on Data Envelopment Analysis (DEA) to reconcile these findings. We conclude that by 1936 inefficient assimilation of modern production techniques – and not the use of different techniques – accounted for most of the U.S./German labor-productivity gap. Our findings call for a reappraisal of the drivers behind cross-country differences in manufacturing performance.

AUTHORS: Marcel Timmer, Joost Veenstra and Pieter Woltjer.

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Data

The data-set for this paper is split into four distinct parts: (1) a benchmark comparison of US and German productivity ca. 1936; (2) US and German horsepower statistics ca. 1907 and 1936; (3) US, German and British output, horsepower, employment and efficiency figures from the Data Envelopment Analysis (DEA) for selected years between 1899 and 1939; and, (4) the raw (dis-aggregate) census data. All data, with the exception of the  raw data, are at the 2-digit or 3-digit industry level.

file variables countries years # obs.
icn_excel YoE_appendix_bm36 va, go, emp, ppp GER, US 1936 408
icn_excel YoE_appendix_hp hp GER, US 1907, 1936 252
icn_excel YoE_appendix_dea va, emp, hp, eff GB, GER, US 1899-1939 10,762
icn_excel YoE_data_all va_q29, emp, hp, yl, kl, va, go, wag, sal, go_p29 GB, GER, US 1899-1939 71,000

IMPORTANT: the data underlying ‘The Yankees of Europe?‘ are freely available as long as the article is cited appropriately (see below).

Sources and Methods

A detailed description of the sources and the steps taken to compile the data-set underlying the Data Envelopment Analysis (DEA) are provided in the PDF file below. The MatLab code for the linear optimization problem to estimate the technology frontiers and the efficiency scores for individual observation is also available for download. Please contact the author for a Minimal Working Example (MWE) of the DEA.

file description
icn_pdf YoE_sources Overview of sources and methods underlying data-set
icn_pdf YoE_deafun MatLab function to estimate technology frontiers and efficiency scores

IMPORTANT: the sources and methods underlying ‘The Yankees of Europe?‘ are freely available as long as the article is cited appropriately (see below).

Download

Available at: Cambridge University Press
Journal: The Journal of Economic History, Volume 76, Issue 3, 2016
DOI: 10.1017/S0022050716000760
Get PDF: “The Yankees of Europe”

Cite

MLA Timmer, Marcel, Joost Veenstra and Pieter Woltjer. “The Yankees of Europe? A New View on Technology and Productivity in German Manufacturing in the Early Twentieth Century.” The Journal of Economic History, 76.3 (2016): 874-908.
APA Timmer, M., Veenstra, J. & Woltjer, P. (2016) The Yankees of Europe? A New View on Technology and Productivity in German Manufacturing in the Early Twentieth Century. The Journal of Economic History, 76(3), 874-908.
Chicago Timmer, Marcel, Joost Veenstra and Pieter Woltjer. “The Yankees of Europe? A New View on Technology and Productivity in German Manufacturing in the Early Twentieth Century.” The Journal of Economic History 76, no. 3 (2016): 874-908.
Harvard Timmer, M., Veenstra, J. and Woltjer, P. 2016 The Yankees of Europe? A New View on Technology and Productivity in German Manufacturing in the Early Twentieth Century. The Journal of Economic History, 76(3), pp. 874-908.
Vancouver Timmer, M., Veenstra, J. and Woltjer, P. The Yankees of Europe? A New View on Technology and Productivity in German Manufacturing in the Early Twentieth Century. The Journal of Economic History, 2016 September 1; 76(3): 874-908.

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