This thesis examines the economic development of industrial engineering in Austria-Hungary between 1870 and 1913. The pattern of sectoral change in Austria's machine-building industry is investigated in Chapter Two. New output estimates indicate that mechanical engineering took a course quite different from that suggested in recent historiography. Austria's capital goods sector was subject to prolonged stagnation during the "Great Depression" of the 1870s and 1880s. But during the subsequent two decades mechanical engineering made a large and rising contribution to overall industrial growth. Chapter Three is concerned with the rise of industrial machine-building in Hungary. Based on new output estimates, the chapter traces the phases and origins of a process which accounted for a markedly faster expansion of mechanical engineering than in the Western half of the Habsburg Empire. Chapter Four provides an analysis of the financial and investment behaviour of major machine-building firms. The growth of companies, the pattern of their investment, the volume and forms of finance varied significantly between firms and over time. The main factors accounting for differential rates of company growth were the diverging development of demand in the various machine-building branches, the impact of the business cycles in Austria and Hungary, and individual firms' preparedness to pursue external expansion. The structure, volume, and direction of the Habsburg Monarchy's trade in machinery are examined in Chapter Five. The study of import tariffs and input price diffentials yields results which suggest that, after the turn of the century, the competitive position of Austro-Hungarian engineering was impeded by an inept tariff policy. The thesis argues that the course of industrial engineering lends strong support to the notion of a "Great Depression" in Austria. Once the depression had been overcome, however, the machine-building industry became one of the two main sectoral sources of growth in industry - despite the effects of an unfavourable tariff policy. Machinery output in Hungary grew at a faster rate than in Austria. Yet its impact on total manufacturing growth was somewhat smaller than in Austria since Hungarian industry as a whole also expanded more rapidly
