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Comparative Productivity in East and Wst German Manufacturing before Reunification

Author

Listed:
  • Beintema, N.
  • van Ark, B.

Abstract

We provide comparisons between East and West Germany before reunification of relative levels of output per hour in manufacturing industries. The comparisons are based on the industry of origin approach which makes use of information on value added and employment derived from production statistics. Output is converted to a common currency with unit value ratios which are based on values at producer prices for individually matched products. This study shows that for the manufacturing sector as a whole, value added per hour worked in East Germany was 28.6% of the level in West Germany in 1987. The comparative productivity performance in food products and beverages and in chemicals in East Germany is well above this average, but the productivity level in machinery and equipment is below 20% of the West German level. The study deals with the problems involved with quality differences, and it discusses the reasons for the more unfavourable performance of East Germany when based on comparisons of value added rather than gross output. We conclude with a discussion of the changes in comparative output and productivity performance in the past five decades. It appears that even after adjustments of the East German time series on real output in manufacturing to a factor cost standard, the comparative productivity level of East Germany in 1950 extrapolated backwards from 1987 would tend to be unrealistically low compared to earlier benchmarks. This calls for a more detailed study of East German growth between 1947 and 1990 as well as for more historical benchmark comparisons between the two regions.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Beintema, N. & van Ark, B., 1993. "Comparative Productivity in East and Wst German Manufacturing before Reunification," Papers 550, Groningen State, Institute of Economic Research-.
  • Handle: RePEc:fth:gronig:550
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    Cited by:

    1. repec:dgr:rugggd:200362 is not listed on IDEAS
    2. Inklaar, Robert & Wu, Harry & Ark, Bart van, 2003. ""Losing ground" : Japanese labour productivity and unit laboour cost manufacturing in comparison to the U.S," GGDC Research Memorandum 200364, Groningen Growth and Development Centre, University of Groningen.
    3. Castaldi, Carolina & Sapio, Sandro, 2006. "The Properties of Sectoral Growth: Evidence from Four Large European Economies," GGDC Research Memorandum GD-88, Groningen Growth and Development Centre, University of Groningen.
    4. repec:dgr:rugggd:200364 is not listed on IDEAS
    5. repec:dgr:rugggd:gd-88 is not listed on IDEAS
    6. Robert J. Hill, 2004. "Constructing Price Indexes across Space and Time: The Case of the European Union," American Economic Review, American Economic Association, vol. 94(5), pages 1379-1410, December.
    7. repec:dgr:rugsom:03c20 is not listed on IDEAS
    8. Bart van Ark & Erik Monnikhof & Marcel Timmer, 1999. "Prices, Quantities, and Productivity in Industry: A Study of Transition Economies in a Comparative Perspective," NBER Chapters,in: International and Interarea Comparisons of Income, Output, and Prices, pages 327-367 National Bureau of Economic Research, Inc.
    9. Michaël Freudenberg & Deniz Ünal-Kesenci, 1994. "French and German Productivity Levels in Manufacturing: A Comparison Based on the Industry-of-Origin Method," Working Papers 1994-10, CEPII research center.

    More about this item

    Keywords

    productivity ; economic reform;

    JEL classification:

    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N60 - Economic History - - Manufacturing and Construction - - - General, International, or Comparative
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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