Describes the first application of the technique of detailed matched plant comparisons to a former communist economic bloc economy. It examines the performance of firms both prior to and at the start of the transition to a market economy and compares productivity levels in East and West Germany.

This study describes the first application to a former communist economic bloc economy of the technique of detailed matched plant comparisons. It is of note that the factory visits to East German plants occurred close to the start of German monetary and economic union, allowing the authors to elucidate both the performance of firms under the previous planning system and the beginnings of the transition to the market economy. It provides benchmark measures of the level of productivity in East German plants compared to counterparts in West Germany (in June 1990 and July 1991). Rates of growth of output per head are indicated, and sources of previous and likely improvements are reviewed. The competitive strengths and weakness of firms are discussed, and attention is given to factors such as product standards, the impact of environmental regulation, switches from eastern Europe to western markets and the suitability of premises. Firms which are judged as likely to survive are identified and further examined. The explanations of East German firms' comparatively low level of productivity are considered, in particular, the role of physical and human capital.

Comparative industrial productivity in East Germany - an overview
methods and descriptions of the sample
comparative company performance
prospects for the future
explanations of comparative performance - machinery
explanations of comparative performance - management and labour force
other explanatory factors - environment, premises and business services
policy and the competitiveness of East Germany - comparisons with western and eastern Europe
comparisons of East and West Germany and Northern Ireland.