ABSTRACT
This chapter shows a simple question which relates the macroeconomic to firm-level microeconomics. What was the impact of World War I on the neutral Swedish economy and Swedish business? The chapter reviews the Swedish economy during the war and examines the industrial evolution of the ball bearings manufacturer SKF as an example of wider Swedish industrial development in this period. Companies which had made gains during the war, such as SKF, used the 1920s to improve their production techniques, overtaking their competition and improving total factor productivity. So, as a result of the war, Swedish long-term economic growth and performance were ultimately enhanced well into the 1920s and beyond. The chapter focuses on the Triple Entente (Britain and its colonies, France and Russia) and the Central Powers (Germany and Austria-Hungary), which yields a time-invariant definition of belligerency. SKF's pre-Great War expansion into Germany, the United Kingdom and other markets took different strategic routes.
