New Economics Papers
on Business, Economic and Financial History
Issue of 2012‒02‒20
24 papers chosen by

  1. New research methods of Business History By Lepore, Amedeo
  2. End or invention of Terroirs? Regionalism in the marketing of French luxury goods: the example of Burgundy wines in the inter-war years By Gilles Laferté
  3. Happy in the service of the Company: the purchasing power of VOC salaries at the Cape in the 18th century By Sophia du Plessis; Stan du Plessis
  4. Two cases of divorce in the town of Arad in the eighteenth century By Ghita, Eugen
  5. Intraregional trade in South America, 1913-50. Economic linkages before institutional agreements By Jose Peres Cajias; Marc Badia-Miro; Anna Carreras-Marin
  6. The introduction of limited liability in nineteenth century England By Paolo Maggioni
  7. Political Ideology and Economic Growth in a Democracy : The French Experience, 1871 - 2009 By François Facchini; Mickaël Melki
  8. Naval Engineering and Labor Specialization during the Industrial Revolution By Darrell J. Glaser; Ahmed S. Rahman
  9. On the human capital of Inca Indios before and after the Spanish conquest: Was there a "pre-colonial legacy"? By Juif, Dácil-Tania; Baten, Joerg
  10. Trade, Technology and the Great Divergence By Kevin H. O’Rourke; Ahmed S. Rahman; Alan M. Taylor
  11. Inequality of Wealth in the Ottoman Empire: War, Weather, and Long-term Trends in Eighteenth Century Kastamonu By Metin M. Cosgel; Bogac A. Ergene
  12. Voting Rights, Share Concentration, and Leverage at Nineteenth-Century US Banks By Howard Bodenhorn
  13. The long-standing demographic East-West-divide in Germany By Sebastian Klüsener; Joshua R. Goldstein
  14. How Insiders Traded before Rules By Braggion, F.; Moore, L.
  15. Human Capital and Technological Transition – Insights from the U.S.Navy By Ahmed S. Rahman
  16. After 20 years of status quo: the failure of gradualism in Slovenia’s post-socialist transition By Spruk, Rok
  17. Statistics in the 150 years from Italian Unification. SIS 2011 Statistical Conference, Bologna, 8 - 10 June 2011. Book of Short Paper By Stefania Mignani; Michele Costa
  18. The SO2 Allowance Trading System and the Clean Air Act Amendments of 1990: Reflections on Twenty Years of Policy Innovation By Gabriel Chan; Robert Stavins; Robert Stowe; Richard Sweeney
  19. Raising the Barcode Scanner: Technology and Productivity in the Retail Sector By Emek Basker
  20. Spatial aspects of the rise of nonmarital fertility across Europe since 1960: the role of states and regions in shaping patterns of change By Sebastian Klüsener; Brienna Perelli-Harris; Nora Elisa Sanchez Gassen
  21. Asymmetric propagation of financial crises during the Great Depression. By Accominotti, Olivier
  22. Women Count: Gender (in-)equalities in the human capital development in Asia, 1900-60 By Friesen, Julia; Baten, Jörg; Prayon, Valeria
  23. Follow the money: what does the literature on banking tell prudential supervisors on bank business models? By Paul Cavelaars; Joost Passenier
  24. Land reform and farm performance in Europe and Central Asia: a 20 year perspective By Lerman, zvi

  1. By: Lepore, Amedeo
    Abstract: Business history, while not clearly established or widely recognized, is an open framework that can include in addition to issues related to the evolving economy, business, market and business, other areas of institutional, cultural and social, related to contemporary events resulting from the long process of industrialization. The first industrial revolution began in the late eighteenth century, the next highest industrial processing of the second half of the nineteenth century, the mass industrialization of the twentieth century and the new post-Fordist landscape of the twenty-first century are the historical landmarks that anchor the activities of a phenomenon that has accompanied the various stages of development of the world economy and, over time characterized by the primacy of capitalist production Buoyancy. Not to deny that in earlier times there have been significant events or structures and there were also areas of significant value to the business history, but want to say that the central focus for the growth of this area is the spread of the capitalist system within industry, agriculture, services, accounting and finance. In summary, business history is an essential element, in terms of quality, for understanding the economic fabric of a country, consistently dynamic and comparative.
    Keywords: Business History; Traditional methods of study; New methodologies for research; Open Innovation; Long Tail;
    JEL: N8 N01 N00
    Date: 2012–02–07
  2. By: Gilles Laferté
    Abstract: French rural worlds have been historicized over the last thirty years. This paper presents a research approach that attempts to reconcile cultural history and social history. Recent studies of regionalism in France have drawn extensively on the constructivist model of the nation and have sought to denaturalize its representations. But in articulating this history of representations with the economic uses made of them -and particularly the specialization of the French economy in luxury markets- it is best to eschew the routine phraseology of ?identity? and prefer the combination of ?social image? and ?affiliation?. This provides a better understanding of how discourse and social structures interlock. Social spheres gravitating around regionalism in the inter-war years were very much interdependent. The nineteenth-century model that portrayed luxury goods as aristocratic was superseded by a model in which luxury products conveyed traditionalist values. The shift in the balance of power in the wine market away from winemerchants and toward vineyard owners can be understood only in the light of the political and cultural networks that vineyard owners managed to develop.
    Keywords: Wine, Folklore, Regionalism, Terroir, Rural Sociology, Ethnology of France
    JEL: Z1
    Date: 2012–01–30
  3. By: Sophia du Plessis (Department of Economics, University of Stellenbosch); Stan du Plessis (Department of Economics, University of Stellenbosch)
    Abstract: This paper contributes to the debate on the level and trajectory of welfare at the Cape of Good Hope during the 18th century. Recent scholarship (for example, Allen 2005) has calculated and compared the levels and evolution of real wages in various European and Asian economies since the early modern period. To this lit-erature we add evidence for unskilled and skilled workers of the Dutch East India Company at the Cape of Good Hope during the 18th century, following De Zwart (2009; 2011), who recently presented evidence for unskilled workers in the Cape for the latter half of the 17th century and the 18th century. We calculate job-specific real wages in a three-step argument; from the narrowest international comparison of wage rates in terms of silver content to one based on a basket of widely consumed goods. The paper’s contributions lie in the breadth of the com-parisons, the inclusion of skilled workers in the comparison and the adaptation of the consumption basket to local conditions and relative prices at the Cape. The results support the hypothesis that at the start of the 18th century, the Cape Col-ony was relatively poor on an international comparison, but as the century un-folded, gained considerably on even the richest contemporary societies.
    Keywords: Real wages, Dutch East India Company (VOC), Cape Colony, Compari-sons of living standards, Economic history of South Africa, Economic history of the Cape Colony
    JEL: N37 N97 E31
    Date: 2012
  4. By: Ghita, Eugen
    Abstract: The two documents, which are the subject of the present study, made to share property in the event of divorce, help to form an image on various aspects of daily life, poorly known from other sources: household size, land property, earnings in marriage furniture, tools, animals, prices, food, secular and religious involvement of the private life etc. In addition to legal information, both inventories, which stood at the base of documents on which the property was to be divided, reveal another perspective on social history of Arad in the late eighteenth century.
    Keywords: marriage; divorce; daily life; household; Arad; eighteenth century
    JEL: J1 J12 J0
    Date: 2011
  5. By: Jose Peres Cajias; Marc Badia-Miro; Anna Carreras-Marin (Universitat de Barcelona)
    Abstract: With the exception of the North American Free Trade Agreement (NAFTA), trade integration is still modest in Latin America, at around 20% of total trade. Surprisingly, these levels were higher in 1945, when the figure for imports stood at 25.6%. Paradoxically, this result shows that trade integration reached its peak before trade integration agreements were signed. To understand the reasons for this, we examine intraregional trade throughout the interwar period (1913-1950). We analyze five national cases: Argentina, Bolivia, Brazil, Chile and Peru. As far as we know, this is the first paper in the literature on intraregional trade during the interwar period. There are other papers on intraregional trade in Latin America, but they focus on the period after the 1960s. The analysis of intraregional trade in the interwar period is also useful to the Latin American industrialization debate. Given the disruption in world trade flows and the existence of some industrial capacity, the paper looks at any possible increase in intra-industry trade. There are two main conclusions: a) with the exception of the World War periods, intraregional trade has been low since 1913; b) in general, intraregional trade reflects the overall trade specialization: there is a high concentration of low value added products.
    Keywords: the great depression, regional integration, the world wars, international trade, latin american economic history, trade agreements
    JEL: N76 N46 F15
    Date: 2012
  6. By: Paolo Maggioni
    Abstract: In this paper I have analysed the development of company law from 1720 through to 1857. During this long period of time, company law assumed the characteristics it has now. At the starting point, company law stood with incorporation granted by the Crown or Parliament on one side and partnership regulated by common law on the other. The development of the modern corporation needed the definition of what were the problems connected to the fact that a firm is run in association and what is the legal framework that allows to solve efficiently with the lowest costs these problems. In this paper I show that the introduction of limited liability gets its meaning from the exact definition of many other aspects of company life, such as bankruptcy procedures, directors’ power and responsibility, shareholders rights, publicity regime for company acts. Accordingly it’s shown that the introduction of the limited liability regime can’t be studied in isolation and it was just the last step in a complex development process.
    Keywords: Corporation and Securities Law
    JEL: K22
    Date: 2011
  7. By: François Facchini (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne); Mickaël Melki (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne)
    Abstract: This paper examines the influence of political ideology on economic growth in the French democracy since 1871. It does so by addressing three main issues : the property and the reliability of a political ideology index in the long-run, the robustness of the relationship between ideology and growth and the specific channels through which political ideology affects economic performance. The main conclusion is that, compared with right-wing parties in power, left-wing governments have promoted equity at the expense of economic growth. It also appears that the main channel through which political ideology has impacted economic performance all along the French democratic experience is the budgetary tool (i.e. fiscal and redistributive policies) which influenced employment and income inequalities. By contrast, there seems to be less or even no empirical support for explanations based on the monetary policy or regulation, such as trade policies or the labor market regulation.
    Keywords: French economic history, 19th century, 20th century, political ideology, partisanship, growth, government performance, fiscal policy, public spending, unemployment, inequality.
    Date: 2012–01
  8. By: Darrell J. Glaser (United States Naval Academy); Ahmed S. Rahman (United States Naval Academy)
    Abstract: This paper explores the roles of capital- and technology-skill complementarities in labor allocation decisions within the U.S. Navy. During the latter 19th century the ocer corps was highly specialized, and was split between groups of line and sta ocers. This was also a time of dramatic technological changes which aected nearly every facet of naval opera- tions. Specically, naval technological developments tended to be \engineering-biased," in that they raised the relative importance of engineer-oriented skills. This created a dilemma for the Navy, as it navigated the balance between the benets of a specialized workforce implementing increasingly complex technologies with rising communication and coordina- tion costs. We rst document the extent of capital- and technology-skill complementarities within the navy which fostered greater labor specialization. We then show how the Navy vitiated the specialized human capital of ocers by blending the corps. The study oers in- sights into how an industry undergoing wrenching technological changes managed its labor and human capital allocation to help the U.S. become a world class naval power.
    Date: 2012–01
  9. By: Juif, Dácil-Tania; Baten, Joerg
    Abstract: Not only the colonial period, but also the pre-colonial times might have influenced later development patterns. In this study we assess a potential pre-colonial legacy hypothesis for the case of the Andean region. In order to analyze the hypothesis, we study the human capital of Inca Indios, using age-heaping-based techniques to estimate basic numeracy skills. We find that Peruvian Inca Indios had only around half the numeracy level of the Spanish invaders. The hypothesis holds even after adjusting for a number of potential biases. Moreover, the finding has also crucial implications for the narrative of the military crisis of the Inca Empire. A number of explanations have been given as to why the Old American Empires were not able to defend their territory against the Spanish invaders in the early 16th century. We add an economic hypothesis to the debate and test it with new evidence: Were the human capital formation efforts of the Inca economy perhaps too limited, making it difficult to react appropriately to the Spanish challenge? --
    Keywords: human capital,age-heaping,Inca empire,inequality,growth
    JEL: I25 N30 N36 O15
    Date: 2012
  10. By: Kevin H. O’Rourke (Oxford University); Ahmed S. Rahman (United States Naval Academy); Alan M. Taylor (University of Virginia)
    Abstract: This paper develops a model that captures the key features of the Industrial Revolution and the Great Divergence between the industrializing \North" and the lagging \South." In particular, a convincing story is needed for why North-South divergence occurred so dramatically during the late 19th Century, a good hundred years after the beginnings of the Industrial Revolution. To this end we construct a trade/growth model that includes both endogenous biased technologies and intercontinental trade. The Industrial Revolution began as a sequence of unskilled-labor intensive innovations which initially incited fertil- ity increases and limited human capital formation in both the North and the South. The subsequent co-evolution of trade and technological growth however fostered an inevitable di- vergence in living standards - the South increasingly specialized in production that worsened their terms of trade and spurred even greater fertility increases and educational declines. Biased technological changes in both regions only reinforced this pattern. The model high- lights how pronounced divergence ultimately arose from interactions between specialization from trade and technological forces.
    Date: 2012–01
  11. By: Metin M. Cosgel (University of Connecticut); Bogac A. Ergene (University of Vermont)
    Abstract: This article offers a quantitative analysis of wealth inequality in the Ottoman Empire, employing data from probate inventories (terekes) of eighteenth-century Kastamonu, a town located in northern Anatolia. Extracting information on the wealth levels and personal characteristics of individuals, we estimate aggregate measures of wealth inequality, namely the Gini Coefficient, the coefficient of variation, and the wealth shares of the wealthiest 10 and 25 percents of population. We use regression analysis to identify the time trend of wealth inequality and determine how warfare, significant weather events, macroeconomic variables, and shifts in population characteristics affected it. JEL Classification: D3, D6, E3, E6, I3, J1, N3, N9, O53 Key words: Wealth, Inequality, War, Weather, Ottoman Empire
    Date: 2011–12
  12. By: Howard Bodenhorn
    Abstract: Studies of corporate governance are concerned with two features of modern shareholding: diffuse ownership and the resulting separation of ownership and control, which potentially leads to managerial self-dealing; and, majority shareholding, which potentially mitigates some managerial self-dealing but opens the door for the expropriation of minority shareholders. This paper provides a study of the second issue for nineteenth-century US corporations. It investigates two related questions. First, did voting rules that limited the control rights of large shareholders encourage diffuse ownership? It did. Second, did diffuse ownership systematically alter bank risk taking? It did. Banks with less concentrated ownership followed policies that reduced liquidity and bankruptcy risk.
    JEL: G21 G3 N2
    Date: 2012–02
  13. By: Sebastian Klüsener (Max Planck Institute for Demographic Research, Rostock, Germany); Joshua R. Goldstein (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Over the last decades numerous studies have dealt with demographic differences between the former communist eastern part of Germany and western Germany. Although the demography of these two regions has converged with respect to mortality and overall fertility levels, non-marital births are the norm in eastern Germany but the exception in western Germany. A number of explanations, stemming from the policy and socio-economic conditions of eastern and western Germany in recent decades, have been put forth. Here, we show that the divide in demographic behavior regarding fertility and marriage pre-dates the division of Germany into a communist east and (capitalist) west. Indeed, the areas in eastern Germany that formed the German Democratic Republic had in average roughly twice the level of non-marital fertility from at least since the middle of the 19th century. The persistence of the past suggests that explanations depending on current conditions are likely to be incomplete and that convergence, if it happens, will be a process lasting many decades or even centuries.
    Keywords: German Empire, Germany, Germany/FRG, Germany/GDR, family formation, fertility, historical analysis, nuptiality, spatial analysis
    JEL: J1 Z0
    Date: 2012–01
  14. By: Braggion, F.; Moore, L. (Tilburg University, Center for Economic Research)
    Abstract: Abstract: U.K. company insiders, such as directors, were legally allowed to trade in the shares of their own companies up until the Companies Act of 1980. We investigate the trading behaviour of directors over the period 1893 to 1907 in the U.K. Although insider trading was profitable, we find relatively few instances of directors who exploited their informational advantage.
    Keywords: Corporate Governance;Insider Trading;London Stock Exchange.
    JEL: N23 G14 G35
    Date: 2012
  15. By: Ahmed S. Rahman (United States Naval Academy)
    Abstract: This paper explores the eects of human capital on workers during the latter 19th century by examining the specic case of the U.S. Navy. During this time, naval ocers belonged either to a regular or an engineer corps and had tasks assigned for their specialized training and experience. To test the eects of specialized skills on career performance, we compile educational data from original-source Naval Academy records for the graduating classes of 1858 to 1905. We merge these with career data extracted from ocial Navy registers for the years 1859 to 1907. This compilation comprises one of the longest and earliest longitudinal records of labor market earnings, education and experience of which we are aware. Our results suggest that wage premia for \engineer-skilled" ocers rapidly deteriorated over their careers; more traditionally skilled ocers were better compensated and promoted more frequently as their careers progressed. This compelled those with engineering skills to leave the service early, contributing to the Navy's failure to keep up with the technological frontier of the time.
    Date: 2012–01
  16. By: Spruk, Rok
    Abstract: In the past 20 years, the Slovenia has been praised as the richest former socialist country, having accomplished the advancement from borrower into donor status at the World Bank and having entered the European Monetary Union as the first country from former socialist block. In the due course of transition to market, Slovenia adopted the gradualist approach to economic reform, emphasizing gradual privatization, excessive regulation of the labor market and financial sector as well as the slow stabilization of public finances. In this paper, we review macroeconomic performance of Slovenia in past two decades in a comparative perspective. The paper outlines the growth trajectory of Slovenia from the onset of Habsburg Empire to the present. We showed that until 1939, Slovenia has almost fully converged to the income per capita frontier of Austria and Italy while the income per capita diverged substantially in the period 1945-1990 from Western European frontier. We review the contours of labor market protectionism, state dominance in banking and financial sector and emergence of the corporate oligarchy as the main symptoms of stalled economic performance given a substantial differential in income per capita between Slovenia and EU15. Moreover, we demonstrate how former communist elites transformed into powerful networks of interest groups which preserved status quo from socialist period through systemic blockade of key economic reforms to stabilize public finances in the light of age-related pressures and to boost productivity growth and structural change.
    Keywords: post-socialist transition; macroeconomic stabilization; economic growth; political economy; Slovenia
    JEL: E02 N13 P27 P16 N14
    Date: 2012–01–19
  17. By: Stefania Mignani (Università di Bologna); Michele Costa (Università di Bologna)
    Date: 2011
  18. By: Gabriel Chan; Robert Stavins; Robert Stowe; Richard Sweeney
    Abstract: The introduction of the U.S. SO2 allowance-trading program to address the threat of acid rain as part of the Clean Air Act Amendments of 1990 is a landmark event in the history of environmental regulation. The program was a great success by almost all measures. This paper, which draws upon a research workshop and a policy roundtable held at Harvard in May 2011, investigates critically the design, enactment, implementation, performance, and implications of this path-breaking application of economic thinking to environmental regulation. Ironically, cap and trade seems especially well suited to addressing the problem of climate change, in that emitted greenhouse gases are evenly distributed throughout the world’s atmosphere. Recent hostility toward cap and trade in debates about U.S. climate legislation may reflect the broader political environment of the climate debate more than the substantive merits of market-based regulation.
    JEL: Q52 Q53 Q55 Q58
    Date: 2012–02
  19. By: Emek Basker
    Abstract: Barcodes and barcode scanners transformed the grocery industry in the 1970s. I use store-level data from the 1972, 1977, and 1982 Census of Retail Trade, matched to data on store scanner installations, to estimate scanners' effect on labor productivity. I find that early scanners increased a store's labor productivity, on average, by approximately 4.5 percent in the first few years. The effect was larger in stores carrying more packaged products, consistent with the presence of network externalities. Short-run gains were small relative to fixed costs, suggesting that the impediment to widespread adoption of the new technology was profitability, not coordination problems.
    JEL: D22 L81 O33
    Date: 2012–02
  20. By: Sebastian Klüsener (Max Planck Institute for Demographic Research, Rostock, Germany); Brienna Perelli-Harris (Max Planck Institute for Demographic Research, Rostock, Germany); Nora Elisa Sanchez Gassen (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: This paper investigates the role of states and regions in shaping spatial patterns of non-marital fertility in Europe since 1960 using a dataset of 497 European subnational regions and smaller countries. Almost all regions registered substantial nonmarital fertility increases over the last 50 years. Prior research by Watkins (1991) has shown that in the first half of the 20th century states played a dominant role in drawing the demographic map of Europe. As a result, subnational regional variation decreased, while differences between countries increased. In this paper, we investigate whether states continue to play such a dominant role in delineating patterns of nonmarital fertility between 1960 and 2007. We find that variation in nonmarital fertility levels increased as a whole across Europe, and states continued to be important for determining these patterns. However, the role of states relative to regions declined in the latest period examined (1990 and 2007). Possible explanations for the changes include increased supranational integration, for example within the European Union, and decentralisation within states leading to increases in variation in subnational contextual conditions.
    Keywords: Europe, fertility, geography, nuptiality, spatial analysis
    JEL: J1 Z0
    Date: 2012–01
  21. By: Accominotti, Olivier
    Abstract: This paper aims to identify the main factors of international financial crisis propagation during the 1930s. Based on an extensive cross-country dataset documenting exchange market turbulence, bond spreads and stock market returns at a monthly frequency and using Principal Component Analysis, I explore the main factors of co-movement in the international financial series. I find that the 1931 crash accounts for most of the co-movement between countries on all financial markets. Not only was the 1931 crisis the main global shock of the Great Depression, but it also acted divisively. Some countries remained unaffected by the shock and even benefited from the crisis. I suggest that these countries' specific path over the 1930s was related to their position as net exporters of capital during the credit boom of the previous decade.
    Date: 2012–01–26
  22. By: Friesen, Julia; Baten, Jörg; Prayon, Valeria
    Abstract: This paper traces the human capital development of 14 Asian countries for the period of 1900-60, using the age-heaping method. We place special emphasis on the gender gap in numeracy and its determinants. In particular, we test the validity of a U-hypothesis of gender equality, implying that gender equality in numeracy declines at initial stages of development and increases again with higher numeracy levels. The U-shaped pattern is strongly confirmed by our data. --
    Keywords: human capital,age-heaping,education,gender inequality,numeracy,development,asia
    JEL: I21 N35 O15
    Date: 2012
  23. By: Paul Cavelaars; Joost Passenier
    Abstract: This paper gives an overview of the recent literature on bank business models, structured along what we deem to be the three central questions when analysing business models. By doing so, we endeavour to provide the recent shift in prudential supervision towards the analysis of bank business models with a sound economic basis. The bottom-line for supervisors - in our view - is that it is essential to understand where the profit comes from and what risks the bank or the banking sector is exposed to in generating those profits.
    Keywords: banking; business model
    JEL: G21 G28
    Date: 2012–02
  24. By: Lerman, zvi
    Abstract: The rural sector in nearly all the countries of Central and Eastern Europe (CEE) and the Commonwealth of Independent States (CIS) has undergone a shift from predominantly collective to more individualized agriculture. At the same time, most of the land in the region has shifted from state to private ownership. These two shifts â a shift in tenure and a shift in ownership â were part of the transition from a centrally planned economy to a more marketoriented economy that began around 1990 in the huge post-Soviet space stretching from Prague to Vladivostok. The transition reforms in the region were unprecedented in their scope and pace. Some 150 million hectares of agricultural land transferred ownership in these countries in just one decade of reform (1990-2000), compared with 100 million hectares in Mexico during 75 years (1917-1992) and 11 million hectares in Brazil during 30 years (1964- 1994) (Deininger 2003). The basis of this shift from collective to individual agriculture lay in two interrelated aspects of agricultural policy reform: land reform, which concerns issues of land use rights and land ownership; and farm reform, which deals with issues of restructuring of farms into individual land holdings. Land reform, together with farm restructuring, set an agenda for the transformation of socialist farms into hopefully a more efficient farm structure with a clear market orientation
    Keywords: Land reform, farm performance, Europe, Asia, Farm Management, Land Economics/Use,
    Date: 2012

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