nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2011‒11‒14
nineteen papers chosen by
Bernardo Batiz-Lazo
Bangor University

  1. WHAT IS STRATEGY? The case of retail finance and English Building Societies By Manuel Hensmans
  2. Capitalism at War By Harrison, Mark
  3. Economic freedom in Muslim countries: an explanation using the theory of institutional path dependency By François Facchini
  4. The inequality trap A comparative analysis of social spending between 1880 and 1933 By Sergio Espuelas
  6. Globalization and the Industrial Revolution By Ferreira, Pedro Cavalcanti; Pessôa, Samuel; Santos, Marcelo Rodrigues
  7. Albert Hirschman and his controversial research report By Ana Maria Bianchi
  8. Tableaux économiques et analyse des business cycles chez Marschak, Frisch et Leontief By Akhabbar, Amanar
  9. An economic history of the Champagne contracts, lessons for regional development By Jean-Baptiste Traversac; Hervé Lanotte
  10. Patent Pools and the Direction of Innovation - Evidence from the 19th-century Sewing Machine Industry By Ryan L. Lampe; Petra Moser
  11. How Polycentric is a Monocentric City? The Role of Agglomeration Economies By Nicolai Wendland
  12. A Sectoral Analysis of Italy's Development: 1861 -2010 By Broadberry, Stephen; Giordano, Claire; Zollino, Francesco
  13. Wandel von Erwerbsbeteilung westdeutscher Frauen nach der Erstgeburt: Ein Vergleich der zwischen 1936 und 1965 geborenen Kohorten By Nadiya Kelle
  14. The Interaction between Culture and Economy in Vietnam By Uwe Blien
  15. The impact of the American Civil War on city growth By Maria Vera-Cabello; Marcos Sanso-Navarro; Fernando Sanz
  16. Integration of North and South American Players in Japan's Professional Baseball Leagues By Sumner LaCroix; Akihiko Kawaura
  17. The birth and the rise of the cluster concept: an evolutionary approach By Annalisa Caloffi; Luciana Lazzeretti; Silvia Rita Sedita
  18. The 1980s Price Bubble on (Post) Impressionism By Fabian Bocart; Ken Bastiaensen; Peter Cauwels
  19. Marketing : comprendre l'origine historique By Pierre Volle

  1. By: Manuel Hensmans
    Abstract: Strategy is the entrepreneurial quest to gain a sustainable competitive advantage. Firms’ dependency on States during systemic economic crises underscores the need to redefine “sustainable”. At periodic intervals, States have to tackle the democratic deficits that spill over from market failures. States hereby support those entrepreneurs that propose democratic solutions most sustainable from the viewpoint of power holders. State support changes the long-term structure of competitive advantage. Accordingly, I redefine strategy as the quest to provide State-sanctioned entrepreneurial responses to democratic deficits. Drawing on historical evidence of English building societies, I demonstrate how entrepreneurial responses that befit State power holders most in face of democratic grievances, are structurally advantaged, be it through fiscal, regulatory or political means. A combination of strategically and fortuitously accumulated State support allowed building societies to leave behind other members of the friendly society movement during the period 1875-1945, only to reproduce this feat with clearing banks in the 1960s and 1970s. I analyse how building societies’ competitive advantage foundered as they failed to adapt to the changing geopolitical framework of British State sanction.
    Date: 2011–11
  2. By: Harrison, Mark (University of Warwick)
    Abstract: The nineteenth century witnessed the triumph of capitalism; the twentieth century saw the bloodiest wars in history. Is there a connection? The paper reviews the literature and evidence. It considers first whether capitalism has lowered the cost of war; then, whether capitalism has shown a preference for war. Both questions are considered comparatively. Neither question receives a clear cut answer, but to simplify: Yes; No.
    Keywords: Capitalism; Corporate Political Action; Keynesianism; Public Finance; State Capacity; Trade; War.
    Date: 2011
  3. By: François Facchini (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: This article explains the level of economic freedom in Muslim countries through the theory of institutional path dependency. Islamic countries are generally not free and they have a poor record regarding property rights. To explain these realities we use the institutional history of Muslim countries. We define three steps: the Arab and Ottoman Empires when Islamic law was of great importance, European colonisation, and the contemporary era with its movement towards a revival of Islam. Islamic law is not liberal. This explain why in general Muslim countries are not free. Colonisation radically changed institutional life in the twentieth century. British colonisation proved to be better than did French or Soviet colonisation. This explains why the Persian Gulf countries are freer. The collapse of the Soviet model explains the speed of liberalisation in former socialist countries (such as Albania, Kyrgyz Republic, and Kazakhstan). Nevertheless, the twentieth century was not just the century of Westernisation. It was also the century of the revival of Islam. The article concludes that the history of the twentieth century does not explain the way in which Muslim countries are attracted by the ideal of the Muslim city. The revival of Islamic intellectual innovations and the evolution of Muslim opinion sustain this thesis. Therefore, there is a dependency on the past and on an imagined future. Islam acts, like yesterday, on the world of institutional possibilities.
    Keywords: Economic freedom Colonisation Imaginary Islam Property rights
    Date: 2011
  4. By: Sergio Espuelas (Universitat de Barcelona)
    Abstract: Using two alternative indicators of redistribution -social transfers and social spending- over the time-period 1880-1933 and using two alternative proxies for inequality -the percentage of non-family farms and the top income shares-, this paper shows that, contrary to what many studies on the origins of the welfare state appear to implicitly suggest, inequality did not favour the development of social policy even in its early stages. Since social policy developed more easily in countries that were previously more egalitarian, it seems that unequal societies were in a sort of inequality trap, where inequality itself was an obstacle to redistribution.
    Keywords: comparative economic history, inequality, social policy, redistribution
    JEL: N30 H50 D63
    Date: 2011
  5. By: Fernando González-Laxe; Federico Martin-Bermúdez; Federico Martin-Palmero
    Abstract: Mobility as a factor of labour is– especially in this stage of economic globalization – a positive aspect that permits the suitability of human capital with regard to the remaining productive factors and the promotion of competitiveness. However, it is also an element that can determine the existence of structural deficiencies in the regions or countries of origin of the emigrants, a true reflection of the inadequacy of matching the demand for labour to an offer that is increasingly qualified. Galicia is a community with extensive experience in the expulsion of manpower to other regions and countries. During the XX century, all the specialists in this area pointed out two waves that were perfectly differentiated in time. The first Galician emigration (fundamentally transoceanic) occurred in the first half of the century and was the result of the deagrarianization of the Galician economy and the incapacity of the industrial and the services sectors to absorb the surplus manpower. The second one was fundamentally directed towards European countries as a consequence, once again, of the inadequate regional capacity of creating extra-agrarian employment and the increasing demand for industrial and services manpower in the economies of the nearby countries. In the last few years of the past century, and especially in the first decade of the XXI century, signs and empirical evidence have started to be detected that in Galicia a wave of what can be de qualified as new emigration is being produced. Indeed, the figures of interregional mobility in Spain indicate the fact that in the last few years, tens of thousands of Galicians have been contracted to work in other Spanish regions. The object of this research, as a result of available date, is to quantify those movements of manpower and, by establishing some starting hypotheses, to verify the causes of the modern third emigration from Galicia.
    Date: 2011–09
  6. By: Ferreira, Pedro Cavalcanti; Pessôa, Samuel; Santos, Marcelo Rodrigues
    Date: 2011–10
  7. By: Ana Maria Bianchi
    Abstract: During the early nineteen sixties, Albert Hirschman negotiated with the International Bank of Reconstruction and Development, part of the World Bank group, the financial support that he needed for an extended visit to several WB development projects scattered throughout the poor areas of the world. The document where he reports his visit was the matter of much controversy between the IBRD staff and Hirschman. One of the major points of disagreement was the latter´s refusal to employ the technique of cost-benefit analysis, then very popular at the WB, as a measure of the success of a project. Hirschman claimed that a one-dimensional scale was unable to grasp the various indirect effects of a project, which, he argued, were so varied as to escape detection by one or even several criteria uniformly applied to all projects. The paper claims that the strong negative reaction that Hirschman found among the WB economists was a crucial factor in his decision to leave the strict realm of economics and to embrace the broader social sciences themes of his subsequent writings.
    Keywords: Hirschman, World Bank, economic development, development economics
    JEL: B20 B31 O1
    Date: 2011–10–26
  8. By: Akhabbar, Amanar
    Abstract: Ragnar Frisch wrote in 1933 that "The complete macrodynamic problem, as I conceive of it, consists in describing as realistically as possible the kind of relations that exist between the various magnitudes in the Tableau Economique ..., and from the nature of these relations to explain the movements, cyclical or otherwise, of the system." My paper examines how the so-called Tableau Economique was employed by three major economists of the 20th century to make mathematical models in order to analyze business cycles, i.e. Jacob Marschak, Ragnar Frisch and Wassily Leontief. We show that the three of them used intersectorial tables to build mathematical models of business cycles. Theoretical mechanisms behind the model are very different between the three models and were inspired by Marxian, Austrian and Walrasian economics. Hence, the same interindustrial Tableau Economique supported very different analyses of business cycles. These works of Marschak, Frisch and Leontief implemented original concepts and tools like dynamic modeling, expectation theory, collective welfare functions, national accounting, and matrix algebra.
    Keywords: Tableau; economique; sectors; business cycle; Marschak; Frisch; Leontief; matrix; welfare; structural change;
    JEL: B21 B23 B22
    Date: 2011–09–01
  9. By: Jean-Baptiste Traversac; Hervé Lanotte
    Abstract: This paper highlights the success factors of the governance of the Champagne supply chain. Scholars on economic organisation stress the role of the contractual enforcement to explain the stability of the economic exchanges and the ability of the economic and political actors to foster their own development (NORTH 1999). Our contribution detailed explicit and implicit mechanisms related to the vinegrower-merchant relations in the regional system. The Champagne region had the particularity to posses a double-head organisation, regrouping all the farms and firms involved in the agronomic, and commercial process of the regional wines. This private board is supported by an institutional environment, common market organisation, French rural acts, and national and international legislations on geographical indication. These legislatives and administrative components define precisely the productive and market rules. Rely on a longitudinal approach we reinterpret the way the interprofessionnal (general) agreement, essential part of the governance of the regional market, evolved during decades (BARRERE 2003). This rereading illustrates the interdependency between explicit and implicit enforcement mechanisms which foster the cooperation. We argue that asymmetric investments in advertising play a major role in the stability of the regional cooperation. The achievement of the reputation of the AOC Champagne by massive advertising and commercial investments mainly realised by the negociants is central to understand the convergence of both party strategies on a long term. These investments step in as catalyst of a negotiated environment and award the self-enforcing character of the contracts. It makes efficient the set of private arrangements and regulatory mechanisms designed to eradicate opportunistic behaviours. During all the second part of the 20th century, the form of the contractual agreements evolved. Governance tools were added and suppressed. However these forced or desired adaptations slightly alter the nature of the cooperative process. The flexibility of the private arrangement, as well as the comprehensive economic policy, ensures the durability of the general agreement in spite of crisis. These results backup the hypothesis of the new institutional economics on the necessity of complementary institutions to make the market efficient (AOKI 2001).
    Date: 2011–09
  10. By: Ryan L. Lampe; Petra Moser
    Abstract: Patent pools allow a group of firms to combine their patents as if they were a single firm. Theoretical models predict that pools encourage innovation in pool technologies, albeit at the cost of innovation in substitutes. Empirical evidence is scarce because modern pools are too recent to allow empirical analyses. This article examines data on patents and innovations by new firms for a historical pool in the sewing machine industry (1856-1877) to examine effects on innovation. Contrary to theoretical predictions, this analysis suggests that pools may discourage innovation in pool technologies and shift R&D towards technologically inferior substitutes.
    JEL: D4 K21 L10 L24 L4 N61 N81 O3
    Date: 2011–11
  11. By: Nicolai Wendland
    Abstract: Can the demise of the monocentric economy across cities during the 20th century be explained by decreasing transport costs to the city center or are other fundamental forces at work? Taking a hybrid perspective of classical bid-rent theory and a world where clustering of economic activity is driven by (knowledge) spillovers, Berlin, Germany, from 1890 to 1936 serves as a case in point. We assess the extent to which firms in an environment of decreasing transport costs and industrial transformation face a trade-off between distance to the CBD and land rents and how agglomeration economies come into play in shaping their location decisions. Our results suggest that an observable flattening of the traditional distance to the CBD gradient may mask the emergence of significant agglomeration economies, especially within predominantly service-based inner city districts.
    Date: 2011–09
  12. By: Broadberry, Stephen (London School of Economics; CAGE); Giordano, Claire (Banca d'Italia); Zollino, Francesco (Banca d'Italia)
    Abstract: Italy’s economic growth over its 150 years of unified history did not occur at a steady pace nor was it balanced across sectors. Relying on an entirely new input (labour and capital) database by us built and presented in the Appendix, together with new Banca d’Italia estimates of GDP by sector, this paper evaluates the different labour productivity growth trends within the Italian economy’s sectors, as well as the contribution of structural change to productivity growth. Italy’s performance is then set in an international context: a comparison of sectoral labour productivity growth rates and levels within a selected sample of countries (UK, US, Germany, Japan, India) allows us to better time, quantify and gauge the causes of Italy’s catching-up process and subsequent more recent slowdown. Finally, the paper analyses the proximate sources of Italy’s growth, relative to the other countries, in a standard growth accounting framework, in an attempt also to disentangle the contribution of both total factor productivity growth and capital deepening to the country’s labour productivity dynamics
    Keywords: Labour, productivity, sectoral disaagregation, international comparison growth,accounting
    Date: 2011
  13. By: Nadiya Kelle
    Abstract: In the early half of the twentieth century in West Germany the male breadwinner model was dominant with men playing the provider role and women staying at home and taking care of children. The employment of mothers was not a common practice, so that they only worked due to the financial situation of the family or at least justified their labor market activity that way. The present paper deals with the question if and how the employment careers of West German women with at least one child have developed in the process of social change. For this purpose a comparison of three cohorts (1936-45, 1946-55 and 1956-65) is carried out. It is of interest whether and how the employment patterns have changed. Another question is what are the crucial factors affecting the maternal employment and how have they changed with time. The analysis reveals that there are solid employment patterns of mothers, which change across cohorts for instance resulting in more part time employment participation after childbirth. Also the effects of the indicated factors have changed, whereas the marriage as well as the social position have lost their influence on the maternal employment in the process of social change.
    Keywords: employment, mothers, childbirth, social change, West Germany, sequence analysis, optimal matching, event history analysis
    Date: 2011
  14. By: Uwe Blien
    Abstract: Historically, the Vietnamese state developed in an area along the Red River and within its delta. The need to protect the inhabitants of this land from dangerous floods gave rise to a “hydraulic societyâ€, which was accompanied by a specific culture. One of the features of this culture is an emphasis on formal education, which was “inherited†from a past in which the passing of an examination was a precondition for acquiring a high position in the state. Today, the Vietnamese culture is a supporting factor in the current development process in Vietnam. Rigorous reform steps carried out since 1986 have transformed the Vietnamese socialist economy, which mainly followed the Soviet blueprint, into a market driven economy which is governed by strong private incentives. The culture predominant in this country on the one hand supports the functioning of the new capitalist system, and on the other hand compensates for many of its weaknesses. As a consequence a development process has been generated which has led to high rates of economic growth. However, it is not without systemic risks.
    Date: 2011–09
  15. By: Maria Vera-Cabello; Marcos Sanso-Navarro; Fernando Sanz
    Abstract: This paper analyzes the persistence of the shock caused by the American Civil War on the relative city size distribution of the United States. Our fi…ndings suggest that the effects of this shock were permanent, which sharply contrasts with previous results regarding World War II for Japanese and German cities. It should be taken into account that the conflict considered in this paper took place at an earlier stage of the industrialization and urbanization processes. Moreover, our results are determined by the fact that the battles were fought in the open …field, not in urban areas. Some related evidence regarding the presence of a safe harbour effect is reported.
    Date: 2011–09
  16. By: Sumner LaCroix (Department of Economics, University of Hawaii); Akihiko Kawaura (Graduate School of Policy and Management, Doshisha University)
    Abstract: Teams in Japan’s two professional baseball leagues began to add foreign players to their rosters in the early 1950s, with the average number of foreign players per team reaching 5.79 in 2004. One reason for their increased use of foreign players was that foreign hitters substantially outperformed Japanese hitters. We show that the pace of team integration with African-American, Latino, and Caucasian players varied substantially across teams, a pattern also observed in North American professional baseball leagues. Using team data for the 1958-2004 seasons, econometric analysis shows that good teams that experienced a poor season played foreign players more frequently in the next season’s games.
    Keywords: Baseball, Japan, integration, NPB, sports, team
    JEL: J71 L83 N35
    Date: 2011–10–30
  17. By: Annalisa Caloffi; Luciana Lazzeretti; Silvia Rita Sedita
    Abstract: The cluster concept has become an increasingly popular topic for researchers and policy makers. Although this concept is not new, its importance increased during the last decades. Following some authors, the persistence of the cluster concept, as well as its diffusion across different contexts and scientific fields, is a result of its fuzziness. The absence of a unique definition of cluster, as well as a unique methodology for “measuring†clusters favor its loose application to a wide variety of contexts (from economics to management, to economic geography, innovation studies and so forth). The paper aims at identifying the evolutionary pattern of the cluster concept, from the emergence, to the growth and the potential future development. The theoretical discussion is empirically supported by a bibliographic analysis based on statistical and social network analysis tools. The point of departure is an original database, consisting of 5332 academic articles about industrial clusters or industrial districts that have been published from 1989 to 2010 in international scientific journals (ISI Web of Science). We first identified the masterpieces of the cluster concept, selecting the most cited articles, second we performed a backward and forward citation analysis, in order to get information on the roots and the future development of the concept. The results shed light on the milestones in cluster literature as well as on its possible developments. The backward analysis emphasizes the multidisciplinary ground of the concept, which emerges in the realm of the agglomeration economy and local competitive advantage studies and spans over innovation and internationalization studies. The forward analysis highlights the new dimensions of the cluster concept, which give particular emphasis on the emergent literature on culture and creativity studies, as well as on the open innovation paradigm.
    Date: 2011–09
  18. By: Fabian Bocart; Ken Bastiaensen; Peter Cauwels (Universit� Catholique de Louvain, Institut de Statistique, Biostatistique et Sciences Actuarielles, Voie du Roman Pays 20, 1348 Louvain-La-Neuve, Belgium)
    Abstract: The Log Periodic Power Law is a model used to define and measure speculative bubbles. This model has proven useful to track bubbles and even predict crashes of liquid asset classes. Using this methodology coupled with properties of cointegration between stocks and art, the 1980s price bubble on Impressionism and Post-Impressionism is analyzed. It is shown formally that there was a bubble in this market between 1986 and 1989. However, when denominating the art index in JPY rather than in USD, no price bubble behaviour was found at all. This observation suggests that Japanese buyers never felt that they were riding a bubble. Despite popular beliefs, no evidence is found that Japanese buyers viewed art as a speculative vehicle instead of a more classic consumption good that was related to their own cultural heritage.
    Keywords: Impressionism, art market, hedonic regression, LPPL, bubble
    JEL: G1 Z11
    Date: 2011–11
  19. By: Pierre Volle (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris Dauphine - Paris IX)
    Abstract: Après avoir montré de quelle manière l'histoire officielle du marketing est actuellement remise en cause, le chapitre se donne pour objectif de mieux comprendre comment le marketing a évolué depuis près de deux siècles. Pour ce faire, nous exposons tout d'abord la controverse sur l'origine du marketing, puis nous présentons quelques pratiques et institutions caractéristiques du marketing moderne, au tournant du 20ième siècle. Pour finir, nous examinons les principaux mouvements internes au marketing qui peuvent expliquent son évolution sur longue période.
    Keywords: marketing; histoire
    Date: 2011

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