Holy Cows and Spilt Milk: A Firm Level Analysis of the Impact of Religious Conflict on Productivity

Lilla salen Session 1: Consequences of Technological Change organized by Suvi Heikkuri


Christian Vedel, Jeanet Bentzen, University of Copenhagen, Nina Boberg-Fazlic, TU Dortmund University, Paul Sharp, University of Southern Denmark, Christian Skovsgaard, University of Southern Denmark


This study examines the impact of non-violent religious conflict on productivity during the industrial revolution in Denmark. Focusing on a Protestant and otherwise homogeneous country, we construct a rich microlevel dataset of 619 butter factories (creameries), the main catalyst of the industrial revolution in Denmark. The Inner Mission - a neo-piestist movement, caused conflict by advocating for the closure of creameries on Sundays in accordance with the Third Commandment. We find that this conflict led to lower productivity in creameries. Using two Bartik-style instruments - the presence of Carl Moe and the spread of Inner Mission in 1890, both before the period studied - we find that the effect is best explained by the creameries’ conflict about religious questions rather than the closure of creameries on Sundays by itself. Our results suggest that non-violent religious conflict can have a negative impact on productivity, which in turn might have long-term consequences for development.


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