New Economics Papers
on Business, Economic and Financial History
Issue of 2005‒01‒02
fourteen papers chosen by

  1. Forging a New Identity: The Costs and Benefits of Diversity in Civil War Combat Units for Black Slaves and Freemen By Dora L. Costa; Matthew E. Kahn
  2. The Anatomy of Union Decline in Britain: 1990-1998 By A Charlwood
  3. On the Periphery of the Russo-Japanese War - Part I By John Chapman; Ian Nish
  4. The Korean Armistice of 1953 and its Consequences - Part I By Gordon Daniels; James Hoare
  5. The Korean Armistice of 1953 and its Consequences - Part II By Rana Mitter; Koji Nakakita
  6. Philanthropy vs. unproductive charity. The case of Baron Maurice de Hirsch By Edgardo E. Zablotsky
  7. Using Networks For Changing Innovation Strategy: The Case of IBM By Dittrich, K.; Duysters, G.; De Man, A-P.
  8. "Internal Labor Markets in Pre-War Mitsubishi Zaibatsu"(in Japanese) By Tetsuji Okazaki
  9. The Danish Cultural Heritage: Economics and Politics By Chr. Hjorth-Andersen
  10. The Danish Museum System By Chr. Hjorth-Andersen
  11. The strategic relevance of business relationships: a preliminary assessment By Filipe J. Sousa; Luis M. de Castro
  12. Social Saving of the Panama Canal By William K. Hutchinson; Ricardo Ungo
  13. The Wage Effects of Schooling under Socialism and in Transition: Evidence from Romania, 1950-2000 By Daniela Andren; John S. Earle; Dana Sapatoru
  14. The Nobel Memorial Prize for Robert F. Engle By Francis X. Diebold

  1. By: Dora L. Costa; Matthew E. Kahn
    Abstract: By the end of the Civil War, 186,017 black men had fought for the Union Army and roughly three-quarters of these men were former slaves. Because most of the black soldiers who served were illiterate farm workers, the war exposed them to a much broader world. The war experience of these men depended upon their peers, their commanding officers, and where their regiment toured. These factors affected the later life outcomes of black slaves and freemen. This paper documents both the short run costs and long run benefits of participating in a diverse environment. In the short run the combat unit benefited from company heterogeneity as this built social capital and minimized shirking, but in the long run men's human capital and aquisition of information was best served by fighting in heterogeneous companies.
    JEL: J24 M12 Z13
    Date: 2004–12
  2. By: A Charlwood
    Abstract: To what extent can the decline in British trade union density between 1990 and 1998 be attributed to decliningopportunities to unionize compared to declining propensity to unionize among workers with the opportunity todo so and to compositional change? This question is answered using data to from both workplaces (from 1990and 1998 Workplace Employee Relations Surveys) and individuals (fro m the British Household Panel Survey).Results show that both falling opportunities and falling propensities to unionize accounted for membershipdecline during this period. Membership fell because unions lacked the power to maintain bargainingrelationships with management, to organize new workplaces, or to uphold the ¿social custom¿ of unionmembership among new workers who took union jobs. However, there was little evidence that declining unionmembership was the result of a change in employee attitudes towards unions.
    Keywords: Labour Management Relations, Trade Unions, Collective Bargaining
    JEL: J5
    Date: 2003–12
  3. By: John Chapman; Ian Nish
    Abstract: Chapman: Major defects in British naval intelligence were the absence of an effective central department, an inferior network of naval attachés in major capitals prior to 1902 and the lack of secure direct cable communications with Northeast Asia. The performance of the Naval Intelligence Department was changed for the better by the efforts of Lord Selborne as First Lord of the Admiralty (1900-5). Selborne's promotion of Britain's alliance with Japan was conditional on a close working relationship with the administration of Theodore Roosevelt.Nish: There was considerable uncertainty and indecision about whether China would take part in the Russo-Japanese war. Finally under considerable outside pressure she declared strict neutrality. Since the civil administration in her Three Eastern Provinces (Manchuria) was in Chinese hands, she inevitably had a role in the war; and her people suffered much.The Portsmouth treaties that ended the war could only be implemented with China's agreement. Foreign Minister Komura had to conclude new treaties with China at the Peking Conference on 22 December 1905.
    Keywords: Japan, China, Russia, Manchuria, Britain, Admiralty, Fisher, Selborne, Balfour, Uchida, Komura, Yuna Shikai, Great Northern Telegraphs, Naval Intelligence, Portsmouth Conference, Peking Conference.
    Date: 2004–04
  4. By: Gordon Daniels; James Hoare
    Abstract: Hoare: Both North and South Korea claim victory in the Korean War. Yet neither makes much of the ending of the war in July 1953, and both have had problems coming to terms with the reality of the war. The reality is that both suffered so much in a conflict that achieved little that formal celebrations seem inappropriate.Daniels: The outbreak of the Korean war in 1950 and the ferocious fighting which took place affected Britain, whose army took part in the war. This essay records the different shades of opinion expressed in its various newspapers/journals.
    Keywords: Korea, Korean war, 1950, Korean armistice, commemoration, Britain, Japan, China, newspapers, museums, monuments.
    Date: 2004–02
  5. By: Rana Mitter; Koji Nakakita
    Abstract: Mitter: China emerged from the Korean War as a more confident actor in the international order. The paper considers three wider contexts within which China's experience of the Korean War should be considered: as part of a spectrum of 20th century wars, as part of a Cold War binarism in politics, and as part of a drive toward technological modernity.Nakakita: The Korean armistice which ended the hot war in Asia encouraged Japanese political parties of the left and right to amalgamate and inaugurate 'the 1955 system'. It caused some domestic hardship by further reducing US Special Procurements which had played a vital part in reviving Japan's postwar industry. It also enabled Japan to re-frame its policies towards China and the US.
    Keywords: Korea, Korean War, Mao, Stalin, Kim II-sung, prisoners-of-war, War of Resistance to Japan, Cold War, Yoshida, Japan Socialist Party, Liberal party, Democratic party, US Special Procurements, China trade.
    Date: 2004–06
  6. By: Edgardo E. Zablotsky
    Abstract: In Argentina today it has become essential for the State to provide assistance to a large portion of the population; nevertheless, this social work lacks purpose unless it is used to encourage those who are assisted to fend for themselves. Otherwise, the beneficiaries would be condemned to virtual indigence, as they would be indirectly excluded from productive society. This concept of philanthropy as opposed to charity is not new; and it is interesting to note that more than one century ago, in Argentina, a singularly successful philanthropic undertaking was carried out that was imbued with this ideology. In 1891 Baron Maurice de Hirsch founded the Jewish Colonization Association, which was to become one of the greatest philanthropic undertakings of its time, through which a gigantic experiment in social welfare was carried out, based on the organized immigration of thousands of people from the Russian Empire to Argentina, with the aim of setting up agricultural colonies. Immigrants were to be given the opportunity to own their land, although this was not a gift, as they were required to pay for it, just as they were required to repay all the loans in kind received during their transfer through to their first harvests, as well as the corresponding interest. This paper represents a first step in the study of this enterprise. In it, we will center our attention on the views on philanthropy held by Baron de Hirsch, illustrating them by reference to the various projects carried out on the basis of that ideology
    Keywords: Baron Maurice de Hirsch, Jewish Colonization Association, philanthropy
    JEL: I38 N96
    Date: 2004–05
  7. By: Dittrich, K.; Duysters, G.; De Man, A-P. (Erasmus Research Institute of Management (ERIM), Erasmus University Rotterdam)
    Abstract: Large-scale strategic change projects in companies may be supported by using alliance networks. This paper shows that IBM?s change from an exploitation strategy towards an exploration strategy required a radically different network strategy as well. By entering into more non-equity alliances, involving new partners in the network and loosening the ties with existing partners, IBM supported its transformation from a hardware manufacturing company to a global service provider and software company.
    Keywords: Networks;innovation;strategic change;exploration/exploitation;IBM;
    Date: 2004–12–23
  8. By: Tetsuji Okazaki (Faculty of Economics, University of Tokyo)
    Abstract: This paper examines the boundaries of the internal labor markets in Mitsubishi Zaibatsu and the career paths of the employees of Mitsubishi Bank, using the employee lists of Mitsubishi Zaibatsu. The fact that a comprehensive employee list was compiled by the personal section of the holding company every year, suggests that there might be a unified internal labor market of Mitsubishi Zaibatsu. However, transfers of employees between the affiliated companies were exceptional, which means that the internal labor market in Mitsubishi Zaibatsu was partitioned into the internal labor markets of the individual companies. On the other hand, each of those internal markets was relatively open to the external market, compared with major companies in present Japan. It is also found that the career paths of the employees of Mitsubishi Bank were different from those of the bank employees in present Japan. In particular, many of the loan section chiefs of Mitsubishi Bank did not have much experience as loan officers, while they spent long time in various sections including deposit section and exchange section.
    Date: 2004–12
  9. By: Chr. Hjorth-Andersen (Institute of Economics, University of Copenhagen)
    Abstract: This paper deals with the Danish cultural heritage understood as the tangible heritage, mainly buildings. The paper briefly describes the political economy of conserving the cultural heritage and the means of preserving it. The main focus of the paper is, however, on the present Danish conservation policy. The paper presents estimates of the costs of preserving the cultural heritage on a national scale. It is concluded that while the level of conservation probably conforms to the wishes of the Danish people marginal decisions are probably misguided. In particular, a detailed examination of the practices of the Danish Conservation Board is presented. The Board is not guided by the recommended cost-benefit perspective but rather in practice devoted to preserving architectonical values.
    Keywords: cultural heritage, cultural policy, preservation
    JEL: Z1
    Date: 2004–12
  10. By: Chr. Hjorth-Andersen (Institute of Economics, University of Copenhagen)
    Abstract: This paper deals with the Danish Museum System and presents a detailed examination of the Danish Museums, though restricted to museums devoted to cultural history rather than arts. The emphasis of the paper is on the system rather than the individual museum, in marked contrast to most contributions in the literature where the individual museum is analyzed. Due to the information policy of the Danish government it is possible to get closer look of the actual workings of the museums than is standard in the literature. The paper concludes that the Danish museums are autonomous to a degree that makes it unlikely that an optimal system of museums is achieved. The paper concludes by discussing some proposals for rearrangement of the museum system.
    Keywords: museums, cultural policy, preservation
    JEL: Z1
    Date: 2004–12
  11. By: Filipe J. Sousa (Instituto Superior de Administração e Línguas (ISAL)); Luis M. de Castro (Faculdade de Economia, Universidade do do Porto)
    Abstract: The ubiquitous contention within the Industrial Networks literature - that business relationships are one of the firm´s most important resources - has not been, in our viewpoint, thoroughly explored. Hence we argue that the ‘Resource-based View of the Firm’ (‘RBV’) may complement the network-based reasoning on the strategic relevance of business relationships. A theoretical framework is proposed – a competence-based view of the firm – which solves RBV´s terminological and inconsistency problems and, more importantly, assures compatibility with the network perspective´s assumptions. The possibility of cross-fertilizing the Industrial Networks and RBV theories seems not only real, but also conceptually profitable for both theoretical fields.
    Keywords: Business Relationships, Industrial Networks, Resource-Based View of the Firm, Competence-Based View of the Firm
    JEL: M10 M31
    Date: 2004–12
  12. By: William K. Hutchinson (Department of Economics, Vanderbilt University); Ricardo Ungo (Department of Economic, Universidad Latina, Panama)
    Abstract: At the time when the Panama Canal was handed over to Panama, most people believed that the Canal was of little material worth to the United States.  However, what was the value of this canal to the United States in the 1920s?  We estimate the social savings generated by the Panama Canal for the United States in 1924 in order to assess the contribution it made to the social welfare of the United States.  We estimate the direct social savings that resulted from lower shipping costs for both international and coastwise trade.  Additionally, we estimate the benefits from two sources of indirect social savings.  The first was generated as a result of the expansion of the feasible market area, due to reduced transport costs.  The second source of indirect social savings is what we refer to as the pro-competitive effect of the competition between the water shipping via the Panama Canal and shipping via the transcontinental railroad.  We argue that this competition resulted in lower freight rates for all railroad traffic due to the way in which the Interstate Commerce Commission regulated railroad freight rates.  Estimates of total social saving range from 0.58 percent of GNP to 1.97 percent of GNP in 1924.  Even the lower estimate of social saving is a value that is one quarter larger than the total cost of acquiring the land and constructing the Panama Canal.
    Keywords: Canals, social saving, transport costs
    JEL: N72
    Date: 2004–12
  13. By: Daniela Andren (University of Gothenborg); John S. Earle (W.E. Upjohn Institute for Employment Research and Central European University); Dana Sapatoru (W.E. Upjohn Institute for Employment Research)
    Abstract: We estimate the impact of schooling on monthly earnings from 1950 to 2000 in Romania. Nearly constant at about 3-4 percent during the socialist period, the coefficient on schooling in a conventional earnings regression rises steadily during the 1990s, reaching 8.5 percent by 2000. Our analysis finds little evidence for either the standard explanations of such an increase in the West (labor supply movements, product demand shifts, technical change) or the transition-specific accounts sometimes offered (wage liberalization, border opening, increased quality of education). But we find some support for institutional and organizational explanations, particularly the high productivity of education in restructuring and entrepreneurial activities in a disequilibrium environment.
    Keywords: returns to schooling, human capital, education, wage differentials, transition, Romania
    JEL: I20 J23 J24 J31 O15 P23 P31
    Date: 2004–11
  14. By: Francis X. Diebold (Department of Economics, University of Pennsylvania and NBER)
    Abstract: Engle’s footsteps range widely. His major contributions include early work on band-spectral regression, development and unification of the theory of model specification tests (particularly Lagrange multiplier tests), clarification of the meaning of econometric exogeneity and its relationship to causality, and his later stunningly influential work on common trend modeling (cointegration) and volatility modeling (ARCH, short for AutoRegressive Conditional Heteroskedasticity). More generally, Engle’s cumulative work is a fine example of best-practice applied time-series econometrics: he identifies important dynamic economic phenomena, formulates precise and interesting questions about those phenomena, constructs sophisticated yet simple econometric models for measurement and testing, and consistently obtains results of widespread substantive interest in the scientific, policy, and financial communities.
    Keywords: Econometric Theory, Finance
    JEL: B31 C10
    Date: 2004–02–01

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