Overcoming barriers to technology transfer

What is it about?

Former socialist systems were considered inferior to Western market economies in terms of innovation and productivity. We provide new evidence on the productivity effects of inventorship in the Soviet-type economy of the German Democratic Republic (GDR). We investigate three types of inventorship: knowledge generation, accumulation and diffusion. By applying a Cobb-Douglas production function using original primary and harmonized productivity data and manually cleaned patent data of the GDR between 1970 and 1989, we show that inventorship contributed to productivity in the industry sectors. This holds for knowledge generation, accumulation and diffusion in general, while in the presence of sufficient local interactive capabilities, international knowledge diffusion did not result in productivity gains. We contribute to empirical evidence on the productivity effects from an alternative system of patenting and innovation.

Featured Image

Why is it important?

This study provided novel evidence on the productivity effects of knowledge generation, accumulation and diffusion in the GDR as a Soviet-type economy. We developed a set of hypotheses based on an innovation systems approach (Radosevic, 1999, 2022; von Tunzelmann et al., 2010; Hipp et al., 2021), which we tested using industry-level data from the GDR between 1970 and 1989. In the GDR, industrialization focused primarily on heavy industries (e.g., Metallurgy and Construction) and key sectors of technical progress (e.g., Chemicals and Electricity). These are the sectors in which our descriptive analysis showed a comparatively large TFP. However, we found only slow growth in resident patents and co-inventors in the GDR for most sectors, while the number of co-inventors from abroad and foreign inventors was particularly high in Chemical, Machinery, Electrical, Metallurgy, Construction and Food sectors in the GDR

Perspectives