How technologically progressive was Germany in the interwar period? Evidence on total factor productivity in coal mining

Abstract

The discussion of the rationalization wave in German industry (1924-1929) still lacks proper industry-level estimates of the rate of technological progress. To close part of this gap, this article investigates total factor productivity (TFP) growth in hard coal mining over the extended period 1913-1938. Stochastic Frontier Analysis is applied to a sample of firms from the Ruhr coal district. TFP grew positively overall and specifically from 1924-1929. Surprisingly, however, TFP growth was even faster from 1933-1938, suggesting that the Nazi economy heavily capitalized on the Weimar rationalization movement, the effects of which are usually not traced beyond 1932.