Financial History Database: German Firm Data and Research 1920-1940

Project Start:01/2018
Researchers:Stephanie Collet, Dennis Gram, Alexander Hillert, Marius Liebald, Uwe Walz
Category: Data Center
Funded by:LOEWE

The research project aims at filling a major gap in Germany’s firms financial history. The project aims at creating a corporate database for Germans firms during the interwar period which would allow addressing important questions not only from a historical perspective but also from a modern finance one. Indeed, the objective of this project is to collect and study data from the period 1920 to 1940. As the data has never been collected before, the first output of the project is a unique database of Germany´s firm level data. Stephanie Collet and Alexander Hillert applied an OCR (optical character recognition) software and data extraction software on a sample of the data and can confirm that with high quality pdfs a full database can be extracted with a 93% success. By analyzing frequent incorrect German words one will improve the texts significantly to resolve a maximum of the 7% errors. Indeed, certain words are often misspelled in the same (incorrect) way. The database will provide yearly corporate data in the hyperinflation period (1921-1924), the 1929 crisis and the Great Depression (1930-1939). With this database, the academic community will be able to better analyze the impact of trouble times (hyperinflation, 1929 crisis, Great Depression) on firms as well as how they survive and which characteristics are crucial to survive a crisis. Historical research holds the key to a better understanding of financial cycles and it allows to analyze tendencies in a long-term perspective. This data will be used to tackle three research questions and three working papers: First, how did firms’ capital structure and M&A activity evolve during the hyperinflation? Second, which characteristics helped banks survive trouble times? Third, what is the economic benefits of political and financial connections in a long term perspective?