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Origins of catch-up failure: Comparative productivity growth in the Habsburg Empire, 1870–1910

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  • SCHULZE, MAX-STEPHAN

Abstract

This article examines patterns of structural change and labour productivity growth in the late nineteenth-century Habsburg Empire. Using shift-share analysis and a set of basic measures to account for the contribution of physical and human capital growth, it seeks to address three questions. First, what was the role of labour productivity growth in per capita income growth? Second, to what extent can structural change account for the comparatively slow growth of the Habsburg economy in general, and Austria's, in particular? Third, how important were physical and human capital stock growth in aggregate labour productivity growth in Austria-Hungary as compared to Germany? The article argues that, in contrast to the Hungarian experience, the size and performance of the agricultural sector imposed a severe burden on Austrian aggregate growth. Further, the evidence points to a significantly smaller contribution of TFP growth to aggregate and industrial labour productivity growth in Austria and Hungary than in Germany. A proximate cause for the TFP growth differential may be found in far smaller positive externalities derived from lower initial human capital endowments in the Habsburg lands.

Suggested Citation

  • Schulze, Max-Stephan, 2007. "Origins of catch-up failure: Comparative productivity growth in the Habsburg Empire, 1870–1910," European Review of Economic History, Cambridge University Press, vol. 11(2), pages 189-218, August.
  • Handle: RePEc:cup:ereveh:v:11:y:2007:i:02:p:189-218_00
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    Cited by:

    1. Crafts, Nicholas, 2020. "British Relative Economic Decline in the Aftermath of German Unification," CAGE Online Working Paper Series 501, Competitive Advantage in the Global Economy (CAGE).
    2. Crafts, Nicholas, 2010. "The contribution of new technology to economic growth: lessons from economic history," Revista de Historia Económica / Journal of Iberian and Latin American Economic History, Cambridge University Press, vol. 28(3), pages 409-440, December.
    3. Matthias Morys & Martin Ivanov, 2009. "Common factors in South-East Europe’s business cycles 1899 - 1989," SEEMHN papers 1, National Bank of Serbia.
    4. Giordano, Claire & Giugliano, Ferdinando, 2015. "A tale of two Fascisms: Labour productivity growth and competition policy in Italy, 1911–1951," Explorations in Economic History, Elsevier, vol. 55(C), pages 25-38.
    5. Grosfeld, Irena & Zhuravskaya, Ekaterina, 2015. "Cultural vs. economic legacies of empires: Evidence from the partition of Poland," Journal of Comparative Economics, Elsevier, vol. 43(1), pages 55-75.
    6. Crafts, Nicholas & O’Rourke, Kevin Hjortshøj, 2014. "Twentieth Century Growth*This research has received funding from the European Research Council under the European Union’s Seventh Framework Programme (FP7/2007-2013) / ERC grant agreement no. 249546.," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.),Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 263-346, Elsevier.
    7. Max‐Stephan Schulze & Nikolaus Wolf, 2012. "Economic nationalism and economic integration: the Austro‐Hungarian Empire in the late nineteenth century," Economic History Review, Economic History Society, vol. 65(2), pages 652-673, May.

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