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Title:Extent and Evolution of the Productivity Gap in Eastern Germany PDF Logo
Authors:Czarnitzki, Dirk
Issue Date:2003
Series/Report no.:ZEW Discussion Papers 03-25
Abstract:Since the German re?unification in 1990, Eastern Germany is a transition economy. After a phase of catching up of productivity with respect to Western Germany from 1991 to 1996, the growth rates in the producing sector have dropped below the Western German ones since 1997. This study investigates whether this macroeconomic picture holds at the microeconomic level. For the special case of Eastern Germany, I suggest to identify productivity gaps by a comparison with Western Germany as a ?productivity benchmark?. Applying an econometric matching procedure allows to study the productivity gap at the firm level in detail. Besides labor and capital, other factors like innovation or firm ownership are taken into account. The macroeconomic facts are broadly confirmed: a significant gap still remains in recent years. Moreover innovators in Eastern Germany perform worse than their Western German pendants and firms owned by Western German or foreign companies perform better than Eastern German owned ones.
Subjects:Productivity Gap
Eastern Germany
Non-parametric Matching
JEL:D24
C14
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des ZEW
ZEW Discussion Papers

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