New Economics Papers
on Business, Economic and Financial History
Issue of 2010‒06‒04
twenty papers chosen by

  1. Combining Grounded Theorizing and Historical Methods: A Proposal to Strengthen the Power of Qualitative Research By Burgelman, Robert A.
  2. Science, Bourgeois Dignity, and the Industrial Revolution By McCloskey, Deirdre Nansen
  3. The state and scope of the economic history of developing regions By Stefan Schirmer; Latika Chaudhary; Metin Coşgel; Jean-Luc Demonsant; Johan Fourie; Ewout Frankema; Giampaolo Garzarelli; John Luiz; Martine Mariotti; Grietjie Verhoef; Se Yan
  4. Climate, population and famine in Northern Italy: General tendencies and Malthusian crisis, ca. 1450-1800 By Guido Alfani
  5. Land abundance and economic institutions: Egba land and slavery, 1830-1914 By Fenske, James
  6. Regional Inequality and Industrial Structures in Pre-War Japan: An Analysis Based on New Prefectural GDP Estimates By Jean-Pascal Bassino; Kyoji Fukao; Ralph Paprzycki; Tokihiko Settsu; Tangjun Yuan
  7. Creative Language, Creative Destruction, Creative Politics By McCloskey, Deirdre Nansen
  8. An Examination of the Statistical Data Sources of the Philippines: Notes on Estimating the Historical GDP of the Primary Industry (2) By Keiya Eto
  9. Prices and Profits in Cotton Textiles During the Industrial Revolution By C. Knick Harley
  10. Why Blu-ray vs. HD-DVD is not VHS vs. Betamax: The co-evolution of standard-setting consortia By Christ, Julian P.; Slowak, André P.
  11. Was Shari'ah indeed the culprit? By Cizakca, Murat
  12. Explaining nineteenth-century bilateralism: economic and political determinants of the Cobden-Chevalier network By Markus Lampe
  13. Infrastructure in Latin America By Calderon, Cesar; Serven, Luis
  14. Why has productivity growth stagnated in most Latin-American countries since the neo-liberal reforms? By Palma, J.P.
  15. Research standards for the Italian young academics: what has changed over the last thirty years? By Adriano Birolo; Annalisa Rosselli
  16. Historical and Comparative Institutional Analysis: Evidences from Deforestation By Sébastien MARCHAND
  17. Determination of Money Supply in India: The Great Debate By Das, Rituparna
  18. The disappointment of expectations and the theory of fluctuations By Meacci, Ferdinando
  19. Clusters vs. Networks – a literature based approach towards an integrated concept By Bode, Alexander; Talmon l'Armee, Tobias; Alig, Simon
  20. References to Africa in Adam Smith's Wealth of Nations and Some Key Propositions Surrounding Them By Amavilah, Voxi Heinrich

  1. By: Burgelman, Robert A. (Stanford University)
    Abstract: Qualitative research in the international business field can benefit from combining grounded theorizing with modern historical methods. Modern historical methods orient qualitative research to studying complex nonlinear organizational dynamics. This provides a basis for differentiating qualitative research from most quantitative social science research. By augmenting historical methods with grounded theorizing qualitative research can develop substantive theory that takes the form of conceptual frameworks. Conceptual frameworks can form a useful bridge between the narratives typically produced by historians and the mathematical and statistical models typically developed by high theorists. This logic, which suggests a somewhat novel role for qualitative research in the hierarchy of theory development, potentially strengthens its raison d'etre.
    Date: 2009–10
  2. By: McCloskey, Deirdre Nansen
    Abstract: What happened to make for the factor of 16 were new ideas, what Mokyr calls “industrial Enlightenment.” But the Scientific Revolution did not suffice. Non-Europeans like the Chinese outstripped the West in science until quite late. Britain did not lead in science---yet clearly did in technology. Indeed, applied technology depended on science only a little even in 1900.
    Keywords: scientific revolution; science; technology; industrial enlightenment; applied technology
    JEL: N00 N7
    Date: 2009–07
  3. By: Stefan Schirmer (University of the Witwatersrand, South Africa); Latika Chaudhary (Scripps College, USA); Metin Coşgel (University of Connecticut, USA); Jean-Luc Demonsant (University Of Guanajuato, Mexico); Johan Fourie (Department of Economics, University of Stellenbosch); Ewout Frankema (Utrecht University, The Netherlands); Giampaolo Garzarelli (University of the Witwatersrand, South Africa); John Luiz (University of the Witwatersrand Business School, South Africa); Martine Mariotti (Australian National University, Australia); Grietjie Verhoef (University of Johannesburg, South Africa); Se Yan (Peking University, China)
    Abstract: This paper examines the state and scope of the study of economic history of developing regions, underlining the importance of knowledge of history for economic development. While the quality of the existing research on developing countries is impressive, the proportion of published research focusing on these regions is low. The dominance of economic history research on the North American and Western European success stories suggests we need a forum for future research that contributes to our understanding of how institutions, path dependency, technological change and evolutionary processes shape economic growth in the developing parts of the world. Many valuable data sets and historical episodes relating to developing regions remain unexplored, and many interesting questions unanswered. This is exciting. Economic historians and other academics interested in the economic past have an opportunity to work to begin to unlock the complex reasons for differences in development, the factors behind economic disasters and the dynamics driving emerging success stories.
    Keywords: Africa, China, Cliometrics, developing countries, development, India, institutions, Latin America, Middle East, new economic history
    JEL: N01
    Date: 2010
  4. By: Guido Alfani
    Abstract: This article provides a picture of long-term developments in the relationship between population and resources in Northern Italy that takes fully into account climate. It analyzes both the slow underlying development of climatic conditions over the centuries (in the theoretical framework of the Little Ice Age) and the consequences of short-term periods of heightened instability. The most severe famines are shown to be events triggered by climatic and environmental factors operating at a time when the maximum carrying capacity of the system had been reached or, at least, when the population was exerting considerable pressure on the potential for food production. This is the case of the famine of the 1590s, the greatest demographic catastrophe of a non-epidemic nature to strike Northern Italy since the Black Death and up to the end of the eighteenth century. The article also analyzes long-term paths of agrarian innovation, suggesting that most (but not all) of this was consistent with Boserup’s idea of chain-reactions of innovations induced by demographic pressure. These processes, though, were too slow to compensate for a rapidly growing population. Finally, the article provides a periodization in which the period between the famine of the 1590s and the great plague pandemic of 1630 is shown to be the crucial turning point in how population dynamics, climate and agrarian innovation interacted.
    Keywords: history of climate, plague, famine, Little Ice Age, Malthusian crisis, Early Modern Italy, agrarian innovation
    Date: 2010–05
  5. By: Fenske, James
    Abstract: The ``land abundance'' view of African history uses sparse population to explain economic institutions. I provide supporting evidence from the Egba of Nigeria. I use early colonial court records to show that Egba institutions fit the theory's predictions. Before 1914, the Egba had poorly defined land rights, practiced extensive agriculture, relied on dependant and forced labor, and used labor to secure loans. There are two major exceptions. First, the Egba sold some land. Second, land disputes existed. These are explained by land scarcity when the Egba initially arrived at Abeokuta and by heterogeneity in the quality of land.
    Keywords: Africa; Nigeria; Property rights; land tenure; slavery; polygyny
    JEL: N17 O12
    Date: 2010–03–15
  6. By: Jean-Pascal Bassino; Kyoji Fukao; Ralph Paprzycki; Tokihiko Settsu; Tangjun Yuan
    Abstract: Studies comparing regional income in Japan before and after World War II have frequently drawn a picture of radical change from an economy characterized by large regional disparities to one characterized by small regional disparities. This paper comes to a very different conclusion. Based on estimates of prefecture-level value added for five benchmark years from 1890 to 1940 (a detailed description of our estimation methodology is provided), we examine trends in the gap of economic development between prefectures during the pre-war period and find that this gap was much smaller than claimed in preceding studies and, in fact, not much greater than during the post-war period. Observing, moreover, a decline in inter-prefectural differences in terms of per-capita gross value added during the pre-war period, we conduct a factor analysis and find that a major reason for this decline was a decline in inter-prefectural differences in same-industry labor productivity. Thus, the picture of modern Japan's economic development presented here is very different from the one painted by preceding studies.
    JEL: N15 O18 O47
    Date: 2010–05
  7. By: McCloskey, Deirdre Nansen
    Abstract: Why did the North-Sea folk suddenly get so rich, get so much cargo? The answers seems not to be that supply was brought into equilibrium with demand---the curves were moving out at breakneck pace. Reallocation is not the key. Language is, with its inherent creativity. The Bourgeois Revaluation of the 17th and 18th centuries brought on the modern world. It was the Greatest Externality, and the substance of a real liberalism. Left and right have long detested it, expressing their detestation nowadays in environmentalism. They can stop the modern world, and in some places have. The old Soviet Union was admired even by many economists---an instance of a “cultural contradiction of capitalism,” in which ideas permitted by the successes of innovation rise up to kill the innovation. We should resist it.
    Keywords: innovation; bourgeois revaluation; liberalism; success of innovation
    JEL: B1 N00
    Date: 2009–06
  8. By: Keiya Eto
    Date: 2010–04
  9. By: C. Knick Harley (Dept of Economics and St. Antony's College, University of Oxford, Oxford)
    Abstract: Cotton textile firms led the development of machinery-based industrialization in the Industrial Revolution. This paper presents price and profits data extracted from the accounting records of three cotton firms between the 1770s and the 1820s. The course of prices and profits in cotton textiles illumine the nature of the economic processes at work. Some historians have seen the Industrial Revolution as a Schumpeterian process in which discontinuous technological change created large profits for innovators and succeeding decades were characterized by slow diffusion. Technological secrecy and imperfect capital markets limited expansion of use of the new technology and output expanded as profits were reinvested until eventually the new technology dominated. The evidence here supports a more equilibrium view which the industry expanded rapidly and prices fell in response to technological change. Price and profit evidence indicates that expansion of the industry had led to dramatic price declines by the 1780s and there is no evidence of super profits thereafter.
    Keywords: Industrial Revolution, cotton textiles, prices, profits.
    JEL: N63 N83
    Date: 2010–05–26
  10. By: Christ, Julian P.; Slowak, André P.
    Abstract: Extensive research has been conducted on the economics of standards in the last three decades. To date, standard-setting studies emphasize a superior role of demand-side-driven technology diffusion; these contributions assume the evolution of a user-driven momentum and network externalities. We find that consumers wait for a dominant standard if they are unable to evaluate technological supremacy. Thus, supply-side driven activities necessarily need to address a lacking demand-side technology adoption. Our paper focuses on Blu-ray vs. HD-DVD as an illustrative case of consortia standard wars. One central role of consortia is to coordinate strategic behavior between heterogeneous agents, e.g. incumbents, complementors (content providers) and others, but also to form a coalition against other standard candidates. More precisely, we argue for signalizing activities through consortia events. We depict the essential role of consortia structures for the recently determined standard war between the High-Definition disc specifications Blu-ray and HD-DVD. Therefore, the paper suggests that unique supply-side dynamics from consortia structures, consortia announcements and exclusive backing decisions of firms determined the standard-setting process in the Blu-ray vs. HD-DVD standard war. This study is based on the following data: movie releases and sales numbers, membership affiliation for structural consortia analysis, and an in-depth event study. A detailed comparison of the technological specifications of both standard specifications supports our argument that there was no technological supremacy of one standard candidate from a consumer-oriented usecase perspective. We furthermore clarify that content providers (complementors) such as movie studios and movie rental services feature a gate-keeping position in the Blu-ray vs. HD-DVD standard war. In the case of Blu-ray, film studios decided the standard war because the availability of movie releases, but not technological supremacy, made the standard attractive to consumers. Finally, we find that there is a co-evolution of the consortia in terms of membership dynamics. Particularly, firm allegiance of heterogeneous agents plays a crucial role. --
    Keywords: Blu-ray,HD-DVD,standard wars,co-evolution,consortia,event study
    JEL: B52 D84 L15 O33
    Date: 2009–05
  11. By: Cizakca, Murat
    Abstract: Why is the Islamic world, once the centre the medieval world, now lagging so far behind? The importance of the topic has attracted economic historians trying to explain this dramatic story of economic decline. Among the various explanations those provided by Kuran concerning the alleged rigidity of Islamic jurisprudence and the Islamic law of inheritance are best known. In this article I will closely examine his views and provide an alternative explanation as to why Islamic companies could not expand beyond a certain size during the early modern age.
    Keywords: Corporations; Islamic law; Islamic backwardness; Islamic law of inheritance.
    JEL: H11 N00 G30
    Date: 2010
  12. By: Markus Lampe
    Abstract: This study investigates the empirical determinants of the treaty network of the 1860s and 1870s. It makes use of three central theories about the determinants of PTA formation, considering economic fundamentals from neoclassical and ‘new’ trade theory, political-economy variables, and international interaction due to trade diversion fears (dependence of later PTAs on former). These possible determinants are operationalized using a newly constructed dataset for bilateral cooperation and non-cooperation among 13 European Countries and the US. The results of logistic regression analysis show that the treaty network can be explained by a combination of ‘pure’ welfare-oriented economic theory with political economy and international interaction models.
    Keywords: Preferential trade agreements, Anglo-French treaty of Commerce, Bilateralism, Political economy, Qualitative choice models
    JEL: N73 F13 F5
    Date: 2010–05
  13. By: Calderon, Cesar; Serven, Luis
    Abstract: An adequate supply of infrastructure services has long been viewed by both academics and policy makers as a key ingredient for economic development. Over the past quarter-century, the retrenchment of Latin America's public sector from its dominant position in the provision of infrastructure, and the opening up of these industries to private participation, have renewed the debate on the role of infrastructure in the region's development. The focus of this paper is three-fold. First, it documents, in a comparative cross-regional perspective, the trends in Latin America's infrastructure development, as reflected in the quantity and quality of infrastructure services and the universality of their access. Overall, this suggests the emergence of an infrastructure gap vis-a-vis other industrial and developing regions. Second, it provides an empirical assessment of the contribution of infrastructure development to growth across Latin America. Third, it examines the trends in the financing of infrastructure investment -- documenting the changing roles of the public and private sectors -- and analyzes how they have been shaped by macroeconomic policy constraints.
    Keywords: Transport Economics Policy&Planning,Public Sector Economics,Infrastructure Economics,Banks&Banking Reform,Non Bank Financial Institutions
    Date: 2010–05–01
  14. By: Palma, J.P.
    Abstract: Latin America’s economic performance since the neo-liberal reforms began has been poor; this contrasts with its performance pre-1980, and also with what was happening simultaneously in Asia. I shall argue that the weakness of the region’s new paradigm is rooted as much in its intrinsic flaws as in the particular way it has been implemented. Discussing Say’s Law, Keynes said that Ricardo conquered England as completely as the Holy Inquisition conquered Spain; the same could be said for neo-liberalism in Latin America: it has conquered the region, including many in its left-wing intelligentsia, as completely (and fiercely) as the Inquisition conquered Spain. This process has been so successful that it has actually ‘closed the imagination’ to conceptualising alternatives.
    Date: 2010–05–29
  15. By: Adriano Birolo (University of Padua); Annalisa Rosselli (Faculty of Economics, University of Rome "Tor Vergata")
    Abstract: In this paper the authors present the findings of their research on a vast database containing the relevant information on the scientific characteristics of the three cohorts of assistant professors recruited in Italy in the early 1980s, the 1990s and the first few years of the new millennium. Their first objective is to trace out the scientific profile of the assistant professor in the early 1980s and the changes that came about in the following twenty-five years due to general changes in the profession and in the specific conditions of the Italian academic market. The second aim is to se what turn in direction the scientific standard has taken for access to a career as a young professor of economics, the number and typology of publciations, the fields of reasearch.
    Keywords: Evolution of the scientific standard, research output, "representative" economist, academic market for economists, evaluation.
    JEL: A11 A B23 B41
    Date: 2010–05–28
  16. By: Sébastien MARCHAND (Centre d'Etudes et de Recherches sur le Développement International)
    Abstract: This paper investigates if past institutional, economic, political, social, and cultural features (i.e legal origins on law and regulations and colonial legacies) interact in shaping the current institutional performances on deforestation in 116 developed and developing countries. A two step approach is implemented. First, we investigate relations between colonial legacies-legal origins and current institutional performances. We ï¬nd that common law countries and previous British colonies have better institutions that French civil law and other past colonized countries. Second, we provide two econometrics procedures to capture some institutional persistences on deforestation which allow to estimate current institutional effects on deforestation conditioned to historical variables. In a ï¬rst time, we run our deforestation model on different samples (under historical variables) and in a second time, interactive variables are introduced. We ï¬nd that (i) French civil law countries deforest less than common law ones; (ii) less corruption and more secured property rights decrease deforestation in common law countries; (iii) better rules of law reduce deforestation but this feature is more likely in previous British colonies or non colonized countries. Finally, this paper shows that current institutional performances are important factors in the process of deforestation and that these factors are conditioned to past influences.
    Keywords: Legal Origins, Institutional persistences, Colonial legacies, corruption, deforestation, Property rights
    JEL: P51 Q23 K10
    Date: 2010
  17. By: Das, Rituparna
    Abstract: Researchers reported that - there were two approaches to money supply determination in India: balance sheet or structural approach and money multiplier approach; the former focused on individual items in the balance sheet of the consolidated monetary sector in order to explain changes in money supply and the latter focused on the relationship between money stock and reserve money; the money multiplier approach emerged strongly as a critic to the balance sheet approach; between January 1976 and January 1978 there was a hot and rich debate between two groups of researchers, one group led by Gupta who believed in the money multiplier theory, the other group of RBI economists, who were not accepting this theory; the debate gave rise to a number of research papers where mostly regression techniques were used to estimate and forecast money supply function; Bhattacharya (1972), Gupta (1972) and Marwah (1972) used regression techniques to estimate money multiplier in India four years before the debate took place. The above debate is narrated below in an analytical style.
    Keywords: money supply; high powered money; reserve money; RBI; Working Group; multiplier; balance sheet; forecast; currency
    JEL: E0 E4
    Date: 2010
  18. By: Meacci, Ferdinando
    Abstract: The role of “errors in time” (Fanno, 1933) or “disappointment of expectations” (Hicks, 1933) was a major object of analysis in the years of high theory when it contributed to the replacement of the paradigm of General Equilibrium Theory by the new paradigm of the Economics of Uncertainty and Expectations that took place in those years. The scope of this paper is to re-evaluate this object of analysis in the light of the evolution of the theory of fluctuations to which it belongs. The paper is thus divided in two Parts. Part I provides a unified account of how the leading authors of those years (Keynes, Hayek, Hicks) dealt with expectations and their disappointment in their theory of fluctuations. Part II provides instead a brief account of the major constructions worked out by some leading authors of what is here called the “years of rational expectations”. The paper shows how the focus on errors in time has been replaced in the latter period by a set of assumptions and arguments which either neglect the impact of the disappointment of expectations on macroeconomic disequilibrium or even exclude the very possibility of this disappointment. The paper concludes by highlighting the decreasing scope and relevance of the theory of fluctuations as one moves from the years of high theory to the more recent years of rational expectations.
    Keywords: Expectations; Disappointment; Errors; Fluctuations
    JEL: E32 E2 E1
    Date: 2009–12
  19. By: Bode, Alexander; Talmon l'Armee, Tobias; Alig, Simon
    Abstract: The cluster concept has steadily increased its importance during the past years – both from practitioners’ and researchers’ perspective. Simultaneously many corporate networks have been established. Researchers from different areas (business management, economics, social and geographical science) are trying to explain both phenomena. As a result of different disciplines’ varying research objects many definitions of clusters exist. Furthermore, the terms cluster and network are often not clearly distinguished. Some authors even merge the terms. Based on a profound literature review, our paper structures the manifold definitions, differentiating between clusters and networks, and provides first practical insights at the case of the Hessenmetall Cluster-Initiative how to integrate the two concepts.
    Keywords: Cluster, Network, Cooperation, Organization, Cluster-Management, Porter, Porter Diamond, Social Network, Value Chain, Industrial District, Cluster-Initiative, Social Relationship
    Date: 2010–05–26
  20. By: Amavilah, Voxi Heinrich
    Abstract: Adam Smith sought to illustrate some of his propositions in The Wealth of Nations (WON) with examples from Africa. However, the examples were few, and many were neither profound nor instructive from a principles viewpoint. I find that Africa figures very little in the WON, and nearly every time it appears cursory. With 20/20 hindsight, one may conclude that opinions about Africa have remained invariant with respect to time. Final value-judgment about whether that is a good or bad thing rests with the reader.
    Keywords: Africa in Wealth of Nations; Adam Smith
    JEL: B31 O55 F10 N17 A11
    Date: 2010–05–26

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