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Cartels, managerial incentives, and productive efficiency in German coal mining, 1881-1913


  • Carsten Burhop

    () (Max Planck Institute for Research on Collective Goods)

  • Thorsten Luebbers

    () (Max Planck Institute for Research on Collective Goods)


In this paper, we evaluate the impact of cartelisation and managerial incentives on the productive efficiency of German coal mining corporations. We focus on coal mining in the Ruhr district, Germany’s main mining area. We use stochastic frontier analysis and an unbalanced dynamic panel data set for up to 28 firms for the years 1881-1913 to measure productive efficiency. We show that coal was mined with decreasing returns to scale. Moreover, it turns out that cartelisation did not affect productive efficiency. Controlling for corporate governance variables shows that stronger managerial incentives were significantly correlated with productive efficiency, whereas the debt-equity ratio did not influence it.

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  • Carsten Burhop & Thorsten Luebbers, 2008. "Cartels, managerial incentives, and productive efficiency in German coal mining, 1881-1913," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2008_13, Max Planck Institute for Research on Collective Goods.
  • Handle: RePEc:mpg:wpaper:2008_13

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    References listed on IDEAS

    1. Lohse, Gerald L. & Johnson, Eric J., 1996. "A Comparison of Two Process Tracing Methods for Choice Tasks," Organizational Behavior and Human Decision Processes, Elsevier, vol. 68(1), pages 28-43, October.
    2. Glimcher, Paul W. & Dorris, Michael C. & Bayer, Hannah M., 2005. "Physiological utility theory and the neuroeconomics of choice," Games and Economic Behavior, Elsevier, vol. 52(2), pages 213-256, August.
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    Economic history; Germany pre-1913; Cartel; Productive efficiency; Corporate Governance;

    JEL classification:

    • N53 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Europe: Pre-1913
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels

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