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Using simulation experiments to test historical explanations: the development of the German dye industry 1857-1913

Author

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  • Thomas Brenner

    () (Philipps University Marburg)

  • Johann Peter Murmann

    () (UNSW Australia Business School)

Abstract

Abstract In a simulation experiment, building on the abductive simulation approach of Brenner and Werker (2007), we test historical explanations for why German firms came to surpass British and France firms and to dominate the global synthetic dye industry for three decades before World War 1 while the U.S. never achieved large market share despite large home demand. Murmann and Homburg (J Evol Econ 11(2):177–205, 2001) and Murmann (2003) argued that German firms came to dominate the global industry because of (1) the high initial number of chemists in Germany at the start of the industry in 1857, (2) the high responsiveness of the German university system and (3) the late (1877) introduction of a patent regime in Germany as well as the more narrow construction of this regime compared to Britain, France and the U.S. We test the validity of these three potential explanations with the help of simulation experiments. The experiments show that the 2nd explanation—the high responsiveness of the German university system— is the most compelling one because unlike the other two it is true for virtually all plausible historical settings.

Suggested Citation

  • Thomas Brenner & Johann Peter Murmann, 2016. "Using simulation experiments to test historical explanations: the development of the German dye industry 1857-1913," Journal of Evolutionary Economics, Springer, vol. 26(4), pages 907-932, October.
  • Handle: RePEc:spr:joevec:v:26:y:2016:i:4:d:10.1007_s00191-015-0430-8
    DOI: 10.1007/s00191-015-0430-8
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    References listed on IDEAS

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    1. Franco Malerba & Richard Nelson & Luigi Orsenigo & Sidney Winter, 2008. "Vertical integration and disintegration of computer firms: a history-friendly model of the coevolution of the computer and semiconductor industries," Industrial and Corporate Change, Oxford University Press, vol. 17(2), pages 197-231, April.
    2. Mathijs De Vaan & Ron Boschma & Koen Frenken, 2013. "Clustering and firm performance in project-based industries: the case of the global video game industry , 1972--2007," Journal of Economic Geography, Oxford University Press, vol. 13(6), pages 965-991, November.
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    4. Rik Wenting & Koen Frenken, 2011. "Firm entry and institutional lock-in: an organizational ecology analysis of the global fashion design industry," Industrial and Corporate Change, Oxford University Press, vol. 20(4), pages 1031-1048, August.
    5. Thomas Brenner & Matthias Duschl, 2014. "Modelling Firm and Market Dynamics - A Flexible Model Reproducing Existing Stylized Facts," Working Papers on Innovation and Space 2014-07, Philipps University Marburg, Department of Geography.
    6. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-337, May.
    7. Gaston Heimeriks & Ron Boschma, 2014. "The path- and place-dependent nature of scientific knowledge production in biotech 1986–2008," Journal of Economic Geography, Oxford University Press, vol. 14(2), pages 339-364.
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    9. Steven Klepper, 2007. "Disagreements, Spinoffs, and the Evolution of Detroit as the Capital of the U.S. Automobile Industry," Management Science, INFORMS, vol. 53(4), pages 616-631, April.
    10. Johann Peter Murmann & Ernst Homburg, 2001. "special feature: Comparing evolutionary dynamics across different national settings: the case of the synthetic dye industry, 1857-1914," Journal of Evolutionary Economics, Springer, vol. 11(2), pages 177-205.
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    Cited by:

    1. repec:eee:respol:v:48:y:2019:i:3:p:649-664 is not listed on IDEAS
    2. repec:spr:eurasi:v:9:y:2019:i:1:d:10.1007_s40821-019-00121-0 is not listed on IDEAS

    More about this item

    Keywords

    Simulation experiment; Historical development; Dye industry; Industrial development; University education; Patent law;

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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