The East-West German gap in revenue productivity:Just a tale of output prices?

East German manufacturers’ revenue productivity is substantially below West levels, even three decades after unification. Using firm-product-level data with product quantities and prices, we analyze the role of specialization show that prominent “extended work bench hypothesis” cannot explain these sustained differences. Eastern firms specialize in simpler varieties generating less consumer value being manufactured or cheaper inputs. Yet, such gap because are physically productive for given prices. Hence, there a genuine price-adjusted physical disadvantage compared to Western firms. : D24, L11, L2, O47