The Research University, Invention, and Industry: Evidence from German History

Abstract

We examine the role of universities in knowledge production and industrial change using historical evidence. Political shocks led to a profound pro-science shift in German universities around 1800. To study the consequences, we construct novel microdata. We find that invention and manufacturing developed similarly in cities closer to and farther from universities in the 1700s and shifted towards universities and accelerated in the early 1800s. The shift in manufacturing was strongest in new and high knowledge industries. After 1800, the adoption of mechanized technology and the number and share of firms winning international awards for innovation were higher near universities.

Industrial Policy and the Great Divergence

“…There is evidence that states' investments into universities and research institutions had positive effects, both by fostering innovation and enabling technology adoption. For the case of Germany, Dittmar & Meisenzahl (2022) show that cities close to universities increase both technology adoption, as measured by mechanization, as well as original innovation, as measured by prizes for industrial innovation awarded in the prestigious 1851 technology fair in Germany. The authors use the Napoleonic invasion of Germany, which led to a major pro-science change in German universities for exogenous variation.…”

Entrepreneurship in the Long-Run: Empirical Evidence and Historical Mechanisms

“…One potential mechanism linking knowledge to growth is entrepreneurship, as knowledge spurs entrepreneurship (Acs et al, 2009) and entrepreneurship promotes economic growth (e.g., Fritsch and Wyrwich, 2017). In another study, Dittmar and Meisenzahl (2020b) can show how higher education in the 19 th century helped transform the economy in the process of industrialization. It is safe to assume that (local) entrepreneurship played a crucial role to make use of this knowledge for the transition toward industrial capitalism.…”

The Fall of Constantinople and the Rise of the West

“…Moreover, I follow Dittmar (2019) and Dittmar and Meisenzahl (2022) and collect data on inventions from Darmstaedter (1908). This data allows me to explore if the disseminated knowledge could systematically be utilized for further scientific progress and inventions.…”