Economic Espionage and Firm Outcomes

Organised by

• Department of Economics

Economic Espionage and Firm Outcomes analyses how the global and pervasive phenomenon of economic espionage affects the performance and production structures of firms in the country that perpetrated it. Exploiting historical data from East Germany that trace the flow of technical and scientific information from Western sources to Eastern recipients, the paper shows that economic espionage increased firms' production, productivity and exports. The results also suggest that the technical change induced by economic espionage is factor-neutral and that the associated productivity gains have propagated through the production network via input-output linkages. In the long run, a higher inflow of espionage information was associated with a higher probability of successful privatisation after German reunification.

Co-authors: Adrian Lerche and Lukas Mergele