nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2006‒06‒10
nine papers chosen by
Bernardo Batiz-Lazo
Bristol Business School

  1. Darwin and the Body Politic: Schaffle, Veblen, and the Shift of Biological Metaphor in Economics By Sophus A. Reinert
  2. Internationalization and the evolution of corporate valuation By Schmukler, Sergio L.; Levine, Ross; Gozzi, Juan Carlos
  3. Long-Horizon Mean Reversion for the Brussels Stock Exchange: Evidence for the 19th Century By J. ANNAERT; W. VAN HYFTE
  4. The optimal selling strategy of a local merchant: the trades of cotton textiles with privileged guilds and unprivileged groups in the Tokugawa era (in Japanese) By Asuka Tanahashi
  5. Evolutionary Economics, Classical Development Economics, and the History of Economic Policy: A Plea for Theorizing by Inclusion By Erik S. Reinert
  7. The Undergraduate Origins of Ph.D. Economists By John J. Siegfried; Wendy A. Stock
  8. Senzen firipin no sensasu ni tsuite -"1903 nen sensasu" to amerika tochi- [in Japanese] By Yoshiko Nagano
  9. Playing Dominoes in Europe: An Empirical Analysis of the Domino Theory for the EU, 1962-2004 By Roland Rieder

  1. By: Sophus A. Reinert
    Abstract: A long tradition of thought in Western political philosophy compares the body of man to the political body. This traditional cosmological frame of reference was, with the publication of Darwin’s Origin of Species, overcome by the emergence of evolutionary social systems. Albert Schäffle [1831-1903] can fruitfully be considered the last major representative of the old trajectory of thought, and Thorstein Veblen [1853-1929] the first of the new. By comparing and contrasting their uses of biological metaphors and the places these occupied in their larger visions of society and the economy, the author explores some of the tensions generated in late nineteenth century political philosophy by the dramatic change in biological paradigm—in other words by Darwin’s first encounter with the body politic.
    Date: 2006–05
  2. By: Schmukler, Sergio L.; Levine, Ross; Gozzi, Juan Carlos
    Abstract: By documenting the evolution of Tobin ' s q before, during, and after firms internationalize, the authors provide evidence on the bonding, segmentation, and market timing theories of internationalization. Using new data on 9,096 firms across 74 countries over the period 1989-2000, they find that Tobin ' s q does not rise after internationalization, even relative to firms that do not internationalize. Instead, q rises significantly before internationalization and during the internationalization year. But then q falls sharply in the year after internationalization, quickly relinquishing the increases of the previous years. To account for these dynamics, the authors show that market capitalization rises before internationalization and remains high, while corporate assets increase during internationalization. The evidence supports models stressing that financial internationalization facilitates corporate expansion, but challenges models stressing that internationalization produces an enduring effect on q by bonding firms to a better corporate governance system.
    Keywords: Small Scale Enterprise,Microfinance,Investment and Investment Climate,Economic Theory & Research,Markets and Market Access
    Date: 2006–06–01
    Abstract: In this paper, we introduce a completely new and unique historical dataset of Belgian stock returns during the nineteenth and the beginning of the twentieth century. This high-quality database comprises stock price and company related information on more than 1500 companies. Given the extensive use of CRSP return data and the data mining risks involved it provides an interesting out-of-sample dataset with which to test the robustness of ‘prevailing’ asset pricing anomalies. We re-examine mean reversals in long-horizon returns using the framework of Hodrick (1992) and Jegadeesh (1991). Our simulation experiments demonstrate that it has considerably better small sample properties than the traditional regression framework of Fama and French (1988a). In the short run, returns exhibit strong persistence, which is partially induced by infrequent trading. Contrary to Fama and French (1988a) and Poterba and Summers (1988), our results suggest that, in the long run, there is little to no evidence of stock prices containing autoregressive stationary components but instead resemble a random walk. Capital appreciation returns exhibit stronger time-varying behavior than total returns. Belgian stock returns demonstrate significant seasonality in January notwithstanding the absence of taxes. In addition, in contrast to other months, January months do show some evidence of mean reversion.
    Keywords: Brussels Stock Exchange, Financial Market History, Market Efficiency, Univariate Stock Return Predictability
    JEL: G10 G14 N23
    Date: 2006–03
  4. By: Asuka Tanahashi (Graduate School of Economics, Osaka University)
    Abstract: Through the Tokugawa era, the productivity in the agriculture steadily increased in the Kinai region, neighboring area of Osaka. However, according to the literature in the 1950s, the development of cottage industry in the region came to be stagnated in the late of Tokugawa era, because the merchant guilds in Osaka privileged by the Tokugawa Shogunate exercised the great bargaining power in trades with local merchants, exploited all the surplus from the trades so that local merchants and craftsmen/women were not allowed to hold surplus. Based on Marxian economics, many economic historians interested in the industrialization worked on the research related to this issue, and reached at the result stated above. Since the 1980s, deviated from Marxian views, fewer economic historians have worked on the development of cottage industry in the late Tokugawa era, and the trades between the privileged guilds and local merchants has been almost neglected as a research issue. However, still important points are how the surplus from trades were shared, which part took the lager portion, and how the local merchants responded to the actions of the city merchants, especially to understand the proto-industrialization, and industrialization. Thus this study is back to the topic discussed in the 1950s. This paper studies the cotton textile trades in the Kinai region. The case this paper inquires is trades between a local merchant in the State of Kawachi, and both of privileged guilds and unprivileged groups of large merchants in Osaka. the commercial center. The point was that the player who took higher risk generally took larger share of surplus. From the study on this case, local merchants seemed to make a kind of portfolio of trades: the ghigh risk and high returnh trades with unprivileged groups of city merchants, and the glow risk and low returnh trades with privileged guilds. Their businesses were balanced between the risk and the returns.
    Keywords: commerce in early modern Japan, rural textile industry, privileged merchants' guild, local merchants, governance of trade.
    JEL: N75 N95 L14
    Date: 2006–06
  5. By: Erik S. Reinert
    Abstract: The author argues that in order to create a qualitative understanding of the factors polarizing the world in growing wealth and growing poverty there is a need to create economics by inclusion, a system where all relevant factors, some of which have been part of the economic discourse for centuries, but also elements (like the different effects of process and product innovations) that are part of evolutionary economics itself, are considered simultaneously. According to the author, this historical/institutional approach to economics would benefit especially the Third World. Moreover, the economics by inclusion should also open the way for policies of inclusion, a system that will put the accent on the wellbeing of the majority and not on the growth of the export sector.
    Date: 2006–01
  6. By: Antonio Serra
    Abstract: In his monumental History of Economic Analysis, Joseph A. Schumpeter calls Serra “the first to compose a scientific treatise … on economic principles and policy.” This working paper, available only hardcopy and upon request, brings the first ever English translation of Antonio Serra’s Breve Trattato. However, the translation is designed to be used in a workshop to take place in Venice in 2007, sponsored by The Other Canon Foundation, which will produce a final English translation of the text for publication.
    Date: 2006–05
  7. By: John J. Siegfried (Department of Economics, Vanderbilt University and AEA); Wendy A. Stock (Department of Economics and Agricultural Economics, Montana State University)
    Abstract: We document the types of undergraduate colleges and universities attended by those who earned a doctorate in economics from an American university from 1966 through 2003 and examine relationships between type of undergraduate institution and attrition and time-to-degree in Ph.D. programs. The total number of new economics Ph.D.s awarded to U.S. citizens has declined precipitously over the past thirty years. Concurrently, the number of economics doctorates who hold undergraduate degrees from U.S. universities has fallen by half: from a high of about 800 in 1972 to about 400 in 2003. Among those who have earned undergraduate degrees from American institutions, the mix of schools attended by the doctorates has remained relatively stable, with about 55 percent of those who earn a Ph.D. in economics each year holding their bachelors degree from a university that offers a Ph.D. in economics, and a bit more than 10 percent holding a bachelors degree from a selective liberal arts college. Currently, 18 of the 25 American undergraduate institutions that send the largest percentage of their graduating classes on to earn a Ph.D. in economics are liberal arts colleges. Graduates of liberal arts colleges also have shorter time-to-degree and higher verbal GRE scores than other economics Ph.D. students.
    Keywords: Ph.D. in economics, undergraduate degree
    JEL: A22 A23
    Date: 2006–05
  8. By: Yoshiko Nagano
    Date: 2006–05
  9. By: Roland Rieder (IUHEI, The Graduate Institute of International Studies, Geneva)
    Abstract: This paper addresses the question whether the domino theory of regionalism is a reasonable explanation for the growth in EU membership over the past forty years. In essence, this theory states that the conclusion of a new regional trade agreement or the deepening of an existing one will induce non-members to join the trade bloc. The empirical analysis proceeds in two stages. First, a gravity analysis shows that the EU was more attractive than EFTA since it triggered a higher degree of trade diversion. In a second step, a discrete choice model is used to assess the importance of variables reflecting domino effects relative to other possible determinants of EU expansion. The findings provide convincing evidence in support of the domino theory.
    Keywords: Regional trade agreements, Western Europe, gravity equation, panel econometrics, qualitative choice models
    JEL: C23 C25 F15
    Date: 2006–05

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