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The Yankees of Europe? A New View on Technology and Productivity in German Manufacturing in the Early Twentieth Century

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  • Timmer, Marcel P.
  • Veenstra, Joost
  • Woltjer, Pieter J.

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.

Suggested Citation

  • Timmer, Marcel P. & Veenstra, Joost & Woltjer, Pieter J., 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, Cambridge University Press, vol. 76(3), pages 874-908, September.
    • Handle: RePEc:cup:jechis:v:76:y:2016:i:03:p:874-908_00
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    Cited by:

    1. Jeffrey Ding & Allan Dafoe, 2021. "Engines of Power: Electricity, AI, and General-Purpose Military Transformations," Papers 2106.04338, arXiv.org.
    2. Daniel Gallardo-Albarrán, 2024. "Capital, Productivity, and Human Welfare Since 1870," Springer Books, in: Claude Diebolt & Michael Haupert (ed.), Handbook of Cliometrics, edition 3, pages 2023-2048, Springer.
    3. Nicholas Crafts & Pieter Woltjer, 2021. "Growth Accounting In Economic History: Findings, Lessons And New Directions," Journal of Economic Surveys, Wiley Blackwell, vol. 35(3), pages 670-696, July.
    4. Daniel Gallardo‐Albarrán & Robert Inklaar, 2021. "The Role Of Capital And Productivity In Accounting For Income Differences Since 1913," Journal of Economic Surveys, Wiley Blackwell, vol. 35(3), pages 952-974, July.

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