New Economics Papers
on Business, Economic and Financial History
Issue of 2007‒08‒18
thirteen papers chosen by

  1. When and how did Japan catch up with Korea? -A comparative study of the pre-industrial economies of Korea and Japan By Hun-Chang Lee
  2. Malthus to Romer: On the Colonial Origins of the Industrial Revolution By Cordoba, Juan-Carlos
  3. Cycles of violence, riots, and terrorist attacks index for the State of California By Gómez-sorzano, Gustavo
  4. The Evolutionary Chain of International Financial Centers By Michele Fratianni
  5. Where have (almost) all the wealthy gone? Spatial decomposition of wealth trends in France, 1820-1939 By BOURDIEU Jérôme; MENENDEZ Martha; POSTEL-VINAY Gilles; SUWA-EISENMANN Akiko
  6. The Evolution of Tax Morale in Modern Spain By Jorge Martinez-Vazquez; Benno Torgler
  7. Slow growth and revolutionary change. The Norwegian IT industry enters the global age, 1970-2005 By Knut Sogner
  8. Expropriators or Turnaround Artists? The Role of Controlling Families in South Korea By Jordan Siegel; Felix Oberholzer-Gee
  9. Rules versus discretion in managing the Hong Kong dollar, 1983-2006 By Tony Latter
  10. La Experiencia de los Primeros Años del Euro By Fernando Ossa
  11. Les privatisations en Russie et la naissance d’un capitalisme oligarchique By Cédric Durand
  12. « If you love me, follow me. » Sibling's migration in France, 1870-1940 By KESZTENBAUM Lionel
  13. Workforce reduction and firm performance: a comparison between French publicly-listed and non-listed companies, 1994-2000. By Arnaud Degorre; Bénédicte Reynaud

  1. By: Hun-Chang Lee
    Abstract: This paper compares the economic development of Korea and Japan during the past three millennia. In particular, it examines why, although the Korean economy was more advanced from around the six century B.C. to around the sixth century A.D., Japan subsequently surpassed Korea in terms of economic development and the gap continued to widen during the Tokugawa period (1603–1867). It is argued that until the eleventh century, the economic gap between Korea and Japan can be largely explained by geography, while from the twelfth to the seventeenth century, differences in institutions, systems of economic integration, and human capabilities – all shaped by a divergence in political systems – played a key role in Japan’s catch-up with Korea.
    Keywords: pre-modern Korea, pre-modern Japan, per capita GDP, catch-up, geography, institutions, human capabilities, system of economic integration, “small world economy”
    Date: 2007–02
  2. By: Cordoba, Juan-Carlos
    Abstract: We propose a unified theory to explain the diverse paths of economic and institutional development of colonized and colonizers following the great discoveries at the end of the XV century. In our theory, the institutional and economic divergence between Spain and England observed during the age of colonization obeys to the same forces put forward by Engerman and Sokoloff (1997) to explain the divergence between Latin America and North America: factor endowments at the moment of the conquest.
    Keywords: Malthus Stagnation; Endogenous Growth; Development
    JEL: O18 J10 N10 O57 E23 O11
    Date: 2007–08–10
  3. By: Gómez-sorzano, Gustavo
    Abstract: I apply the Beveridge-Nelson business cycle decomposition method to the time series of per capita murder in the State of California. (1933-2005). Separating out “permanent” from “cyclical” murder, I hypothesize that the cyclical part coincides with documented waves of organized crime, internal tensions, breakdowns in social order as riots, crime legislation, social, and political unrest, and recently with the periodic terrorist attacks to the U.S. The estimated cyclical component of murder warns that terrorist attacks against the U.S. have affected California creating estimated turning point dates marked by the most tragic terrorist attacks to the nation: the shut down in power in NYC in 1965, the World Trade Center Bombing in 1993, and 9/11 2001. This paper belongs to the series of papers helping the U.S identify the closeness of terrorist attacks, and constructs the attacks index for California. Other indexes constructed include the Index for the U.S., New York State, New York City Arizona State Massachusetts State These indexes must be used as dependent variables in structural models for terrorist attacks and in models assessing the effects of terrorism over the U.S. economy.
    Keywords: A model of cyclical terrorist murder in Colombia; 1950-2004. Forecasts 2005-2019; the econometrics of violence; terrorism; and scenarios for peace in Colombia from 1950 to 2019; scenarios for sustainable peace in Colombia by year 2019; decomposing violence: terrorist murder in the twentieth in the United States; using the Beveridge and Nelson decomposition of economic time series for pointing out the occurrence of terrorist attacks; decomposing violence: terrorist murder and attacks in New York State from 1933 to 2005; terrorist murder; cycles of violence; and terrorist attacks in New York City during the last two centuries.
    JEL: O51 H56 C22 K14 K42 D74 N42
    Date: 2007–01–23
  4. By: Michele Fratianni (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)
    Abstract: Financial products are unstandardized and subject to a great deal of uncertainty. They tend to concentrate geographically because of the reduction in information costs resulting from close contacts. Concentration leads to economies of scale and encourages external economies. Great financial centers enjoy a high degree of persistence but are not immune from decline and eventual demise. Yet, their achievements are passed along in a an evolutionary manner. In revisiting the historical record of seven international financial centers – Florence, Venice, Genoa, Antwerp, Amsterdam, London and New York — the paper finds evidence of a long evolutionary chain of banking and finance. As to the present and the future, the forces of integration are likely to give an additional boost to the persistence of international financial centers.
    Keywords: banking, evolution, finance, money, Genoa, Venice, Florence, Antwerp, Amsterdam, London, New York
    JEL: G15 G21 H63 N20
    Date: 2007–08
    Abstract: This paper uses a unique database of individual estates to explore the geographical dimension in the historical evolution of the wealth distribution in France since 1820 onwards. We use inequality index decomposition techniques and micro-simulations of wealth distributions to stress the differences in economic growth and wealth accumulation between rural areas, provincial towns and Paris.
    Keywords: wealth distribution, decomposition, dualism.
    JEL: C14 J11 H20 O18
    Date: 2007–07
  6. By: Jorge Martinez-Vazquez; Benno Torgler
    Abstract: This paper studies the evolution of tax morale in Spain in the post-Franco era. In contrast to the previous tax compliance literature, the current paper investigates tax morale as the dependent variable and attempts to answer what actually shapes tax morale. The analysis uses survey data from two sources: the World Values Survey and the European Values Survey, allowing us to observe tax morale in Spain for the years 1981, 1990, 1995, and 1999/2000. The study of the evolution of tax morale in Spain over nearly a 20-year span is particularly interesting because the political and fiscal system evolved very rapidly during that period.
    Keywords: Spain, Tax morale, Tax compliance, Constitutional and political changes, fiscal system, endogenous preferences.
    JEL: H26 H73 K42 O17 Z13
    Date: 2007–08–14
  7. By: Knut Sogner (Norwegian School of Management)
    Abstract: The article concludes that although the Norwegian IT industry has been lacking in export success the last 30 years, it has been important for the development of the Norwegian economy. Several IT companies have been on the verge of international breakthroughs, but have been stopped by rising costs and guided by national opportunities. The rise of the important oil-sector has been both a hindrance and an opportunity for the Norwegian IT industry. Specialised products for national markets rather than general mass-market products have become the norm for the Norwegian IT industry. This development had to a remarkable degree been associated with continuity in terms of organisations and people. The firms these people and organisations have been attached too, however, have experienced turbulence, bankruptcy and change, making the whole development from 1970 until today a seemingly messy and problematic affair. But this has really been a period of IT industry growth, and in the end the national development is reasonably successful.
    Date: 2007–08
  8. By: Jordan Siegel; Felix Oberholzer-Gee
    Date: 2007–02
  9. By: Tony Latter (Hong Kong Institute for Monetary Research)
    Abstract: This paper examines the way in which Hong Kong¡¦s currency board has operated since its re-introduction in 1983. It discusses currency board design and the extent to which Hong Kong has conformed to particular principles. The core of the paper is an assessment of the rules-versus-discretion question. From 1983 to 1988 the currency board convertibility obligation applied, in effect, to physical cash only. Arbitrage could not be relied upon to ensure that the market rate converged to 7.80, so intervention ¡V mostly in the foreign exchange market ¡V played a significant role. In 1988 the authorities acquired the means to apply currency board principles also to the reserve balance of the banking system, but over the next ten years they did not exploit that to full advantage in the currency board context. They gave no convertibility promise for the reserve balance and seldom allowed foreign exchange transactions to trigger currency-board-type adjustment. They concentrated instead on managing bank liquidity or interest rates, very often via money market intervention, albeit subject to the overriding goal of a stable exchange rate. But the range which defined that stability was never revealed. Although this exercise of discretion and the departures from strict currency board principles were not obviously damaging, they may have complicated official procedures unnecessarily, and may have raised doubts as to the authorities¡¦ longterm commitment to 7.80. In other words, rather than helping to settle markets, the tactics may at times have disturbed them. Reforms in 1998 included a weak-side convertibility undertaking for banks¡¦ reserve money at 7.80 (after transition), but left strong-side intervention to the discretion of the Monetary Authority. It was only in 2005 that a firm strong-side undertaking was introduced at 7.75, with the weak side bound being moved to 7.85 in order to provide symmetry. Now, only one minor element of discretion ¡V for intrazone intervention ¡V remains. Whereas discretionary interventions were probably very necessary in the early years after 1983, the authorities could have moved more quickly after 1988 to reach the almost completely rule-based status of today. But the stability of the exchange rate over the entire period speaks for itself, and it is not obvious that stricter adherence to currency board principles would have delivered a materially different outcome.
    Date: 2007–01
  10. By: Fernando Ossa (Instituto de Economía. Pontificia Universidad Católica de Chile.)
    Abstract: La unificación monetaria en la Unión Europea (UE) comenzó en enero de 1999. A partir de esa fecha once países fijaron irrevocablemente el tipo de cambio de sus monedas con respecto a una unidad de cuenta denominada euro, y el Banco Central Europeo asumió el control de las ofertas monetarias nacionales. A comienzos del año 2002 se emitieron billetes y monedas de euros, con lo cual el euro reemplazó a las monedas nacionales de los once países participantes. En la actualidad pertenecen al área euro trece países. Este trabajo estudia la experiencia de los primeros años del euro, es decir, desde el comienzo de la unificación monetaria en 1999 hasta el presente. En la sección dos se presenta el desarrollo del proceso de integración monetaria en la Unión Europea, desde el Sistema Monetario Europeo hasta la adopción del euro. La tercera parte analiza el impacto del euro en el comercio de bienes y servicios entre los países miembros, y en la integración de los mercados financieros. La cuarta sección estudia la política monetaria y fiscal en el área euro. En la quinta parte se analiza la función del euro como dinero internacional, tanto en los usos privados como oficiales. La sección sexta y final corresponde al resumen y conclusiones.
    Keywords: euro, unificación monetaria, bancos centrales, integración
    JEL: E42 E58 F33 F36
    Date: 2007
  11. By: Cédric Durand (CEPN - Centre d'économie de l'Université de Paris Nord - [CNRS : UMR7115] - [Université Paris-Nord - Paris XIII], CEMI - Centre d'études des modes d'industrialisation - [Ecole des Hautes Etudes en Sciences Sociales])
    Abstract: Les privatisations engagées en Russie au cours de la décennie 1990 représentent la plus grande réforme de la propriété jamais entreprise. L'introduction présente le contexte de cette transforpmation majeure. La section suivante est consacrée à l’émergence de la question des privatisations dans l’URSS finissante. Les conditions politiques de l’adoption d’une politique radicale en matière de changement des formes de propriété sont ensuite examinées. La section 4 et la section 5 présentent les deux étapes des privatisations en Russie. Les faiblesses des mobilisations sociales et la défaillance de l’Etat sont évoquées dans la sixième section. Avant de conclure, la section 7 présente succinctement le débat économique occulté sur la question de la propriété des moyens de production.
    Keywords: Russie - Privatisations - Capitalisme oligarchique - transformations post-socialistes
    Date: 2007–08–11
  12. By: KESZTENBAUM Lionel
    Abstract: Recent works emphasize the role of the family in migration decisions. They particularly insist on the specific schedule of mobility that depends not only on individual life-cycle but also on the situation of the whole family at a given time. French military registers provide us with very detailed information on migrations, scarcely available in other sources. . We consider the smallest family group, male siblings, and focus on their life-cycle migration behaviours. We start by testing the simplest family indicator, birth rank and we show that, by itself, it has no effect on migration decisions. Mobility is not constrained by the order of birth among brothers. We then study whether or not there is competition among siblings and, in particular, if the migration of one of them encourages or prevents mobility of the others. Comparing the chances for an individual to move before and after the migration of his brother, we show that brother mobility did have a positive influence on someone's own mobility. But this result holds only for short distance migration. In other words, the short distance migration decision of an individual is heavily influenced by his brother's own short distance migration. Therefore, we argue that this kind of mobility is a collective decision that depends on family strategies whereas long distance migration, which is much more costly, is constrained and heavily dependant on individual characteristics such as his occupation before mobility. This approachs heds new light on the migration process and insists on its family component.
    Keywords: migration, family strategy, social network.
    JEL: N3 O15
    Date: 2007–06
  13. By: Arnaud Degorre; Bénédicte Reynaud
    Abstract: Using an exhaustive database with labour, accounting and financial market information on French firms (1994-2000), the authors analyse the causes and the consequences of a workforce reduction in 1996 - the year chosen as reference - on firms' performance in a long term perspective. One important contribution to the topic consists in comparing the estimates of publicly-listed and non-listed companies. As far as we know, the comparative method had not be used before. A logistic model shows that in both groups, headcount reduction occurs in less-productive and financially distressed firms, resorting to downsizing as a defensive response to an adverse economic shock. However, the former anticipates better than the latter the decision to eliminate jobs. An econometric model that captures the initial characteristics of the firms, suggests the major performance indicators are significantly improved only for non-listed companies. Yet, there is no net gain on the full period studied.
    Date: 2007

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