IDEAS home Printed from https://ideas.repec.org/p/jrp/jrpwrp/2023-001.html
   My bibliography  Save this paper

Shades of a Socialist Legacy? Innovation Activity in East and West Germany 1877-2014

Author

Listed:
  • Michael Fritsch

    (Friedrich Schiller University Jena, Germany)

  • Maria Greve

    (Utrecht University, The Netherlands, and Friedrich Schiller University Jena, Germany)

  • Michael Wyrwich

    (University of Groningen, The Netherlands, and Friedrich Schiller University Jena, Germany)

Abstract

The unification of the East and West German states in 1990 initiated the integration of two distinct innovation systems. In this process, the poorly functioning socialist system of East Germany adopted the formal institutions and organization of West Germany, a western-style market economy. We investigate the effect of this integration on patenting activity by applying a difference-in-difference approach. While patenting activity increased in both parts of the country until recently, the gap between East and West Germany widened considerably over time. This divergence in innovation activity suggests that current East-West differences may be indirectly rooted in this socialist legacy and the sudden shock transformation that occurred upon reunification. We also find that the similarity of the technology profile of the East and West German innovation systems is crucial to understand the divergence. So, East German innovation activity fell behind especially in technologies where both East and West Germany were specialized in before re-unification. The same applies to technologies where only West Germany was specialized in. Our findings indicate that integrating the two innovation systems mainly benefitted the West.

Suggested Citation

  • Michael Fritsch & Maria Greve & Michael Wyrwich, 2023. "Shades of a Socialist Legacy? Innovation Activity in East and West Germany 1877-2014," Jena Economic Research Papers 2023-001, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2023-001
    as

    Download full text from publisher

    File URL: https://oweb.b67.uni-jena.de/Papers/jerp2023/wp_2023_001.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Innovation; Socialism; Transformation; Germany;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jrp:jrpwrp:2023-001. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.wiwiss.uni-jena.de/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Markus Pasche (email available below). General contact details of provider: http://www.wiwiss.uni-jena.de/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.