Cartels, Managerial Incentives, and Productive Efficiency in German Coal Mining, 1881-1913

33 Pages Posted: 15 Jul 2008  

Carsten Burhop

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods

Thorsten Luebbers

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods

Date Written: April 2008

Abstract

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.

Keywords: Economic history, Germany pre-1913, Cartel, Productive efficiency, Corporate Governance

JEL Classification: N53, L41, L71

Suggested Citation

Burhop, Carsten and Luebbers, Thorsten, Cartels, Managerial Incentives, and Productive Efficiency in German Coal Mining, 1881-1913 (April 2008). MPI Collective Goods Preprint, No. 2008/13. Available at SSRN: https://ssrn.com/abstract=1160135 or http://dx.doi.org/10.2139/ssrn.1160135

Carsten Burhop (Contact Author)

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

Thorsten Luebbers

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

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