nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2013‒03‒09
sixteen papers chosen by
Bernardo Batiz-Lazo
Bangor University

  1. On the Relationship Between Fertility and Wealth: Evidence from Widow Suicides (Satis) in Early Colonial India By Sanghamitra Bandyopadhyay and Elliott Green
  2. "The Corporate Economies of America and Europe 1790-1860" By Leslie Hannah
  3. "A Global Census of Corporations in 1910" By Leslie Hannah
  4. Was Harrod Right? By Kevin Hoover
  5. Don't make war, make elections franchise extension and violence in XIXth-century Colombia By Leopoldo Fergusson; Juan F. Vargas
  6. A Western Reversal since the Neolithic? The long-run impact of early agriculture By Olsson, Ola; Paik, Christopher
  7. War and Inquisition: Repression in Early Modern Spain By Vidal-Robert, Jordi
  8. Expansion and Transformation of the Export-Oriented Silk Weaving District: The Case of Fukui in Japan from 1890 to 1919 By Tomoko Hashino, Keijiro Otsuka
  9. The Evolving Domain of Entrepreneurship Research By Carlsson, Bo; Braunerhjelm, Pontus; McKelvey, Maureen; Olofsson, Christer; Persson, Lars; Ylinenpää, Håkan
  10. The Sledge on the Slope or: Energy in the Economy, and the Paradox of Theory and Policy By Lindenberger, Dietmar; Kümmel, Reiner
  11. Choix stratégique dans l’industrie des platesformes de loisirs électroniques : une application des modèles ‘History-friendly’. By Thierry Burger-Helmchen
  12. American politics, the presidency of the World Bank, and development policy By Lavelle, Kathryn C.
  13. De la Moneda Metálica al Billete de Banco en Medellín y Bogotá (1871-1885): complementariedad y sustitución de medios de pago en un régimen de banca l By Kelly Vanessa Acuña Mantilla; Andrés Álvarez
  14. The application of discrete choice experiments in health economics: a systematic review of the literature By Alessandro Mengoni; Chiara Seghieri; Sabina Nuti
  15. Man and Machine in Macroeconomics By Kevin Hoover
  16. Governments and legislative production in France: the database (1959-2012) By Nicolas Gavoille

  1. By: Sanghamitra Bandyopadhyay and Elliott Green
    Abstract: Evidence on the pre-modern relationship between wealth and fertility has so far almost entirely relied upon data from Europe. We use British colonial records from early 19th-century India on widow suicides (satis) to show that there is a robust positive relationship between income and fertility.
    Keywords: fertility, wealth, early colonial India
    JEL: J45 H11 J23
    Date: 2013–02
  2. By: Leslie Hannah (CIRJE, University of Tokyo and Department of Economic History, London School of Economics)
    Abstract: Although early corporate data are sparse, the statistics of individual incorporations by special act in 1790â€1860 assembled by Sylla and Wright leave no doubt that new creations of corporations proper in the US rapidly outstripped those in France, Prussia and the UK. However, other limited liability entities †notably commandites (with and without shares) †were earlier and numerous in continental Europe and the numbers of extant companies, and particularly their aggregate paidâ€up share capitals, were closer together in 1860. It was the UK, not the US, which continued to lead corporatization as measured by the ratio of corporate share capital to GDP and it was not until the twentieth century that the US caught up, while both France and Germany lagged. UK corporate business by the midnineteenth century had more capital because of its access to large integrated markets, a rich menu of corporate forms and low interest rates. Thus, while the distinctive feature of US corporations was that they were small and numerous, UK corporations were larger, more capitalâ€intensive, less prone to disappear and had more dispersed ownership.
    Date: 2013–02
  3. By: Leslie Hannah (CIRJE, University of Tokyo and Department of Economic History, London School of Economics)
    Abstract: Estimates of the extent of the corporate economy in eightyâ€one countries in 1910, when the number of corporations globally reached about half a million, show that the US and the British Empire alone accounted for threeâ€quarters of these. The aggregate market value of approaching a hundred stock exchanges in the Empire exceeded that of the then similarly numerous US securities markets analyzed in <I>Moody's Manual</I>. However, American corporations outnumbered British ones, because the US had many more, small, private (unquoted and often familyâ€owned) corporations. Continental Europe collectively lagged the Anglosphere both by number and value of corporations. The capitalist institution that now dominates global business thus initially prospered less under the French or German civil law systems †adopted by most world economies †than under English common law and its derivatives. Within these legal families, the corporate form was preferred to the limited partnership almost everywhere that offered simple, cheap and flexible registration for public and private companies. A century later, despite the suppression of the corporation for many decades in some countries, there were many times more corporations in all countries and patterns of adoption were converging. We find substantial differences in 1910 between relatively poor enclave economies with capitalâ€importing corporate sectors and economies at various income levels with a vibrant local small private company sector. This new quantitative perspective challenges some orthodoxies and raises new questions about the relationship between early corporate development and economic outcomes.
    Date: 2013–02
  4. By: Kevin Hoover
    Abstract: Modern growth theory derives mostly from Robert Solow’s “A Contribution to the Theory of Economic Growth” (1956). Solow’s own interpretation locates the origins of his “Contribution” in his view that the growth model of Roy Harrod implied a tendency toward progressive collapse of the economy. He formulates his view in terms of Harrod invoking a fixed-coefficients production function. This paper, first, challenges Solow’s reading of Harrod, arguing that Harrod’s object in providing a “dynamic” theory had little to do with the problem of long-run growth as Solow understood it, but instead addressed the medium run fluctuations. It was an attempt to isolate conditions under which the economy might tend to run below potential. In making this argument, Harrod does not appeal to a fixed-coefficients production function – or to any production function at all, as that term is understood by Solow. The paper next traces the history of the dominance of Solow’s interpretation among growth economists. These tasks belong to the history of economics. The paper’s final task belongs to economic history. It offers an informal reexamination of economic history through the lens of Harrod’s dynamic model, asking whether there is a prima facie case in favor of Harrod’s model properly understood.
    Keywords: economic growth, Roy Harrod, Robert Solow, dynamics, dynamic instability, dnife-edge, warranted rate of growth, natural rate of growth
    JEL: B22 O4 E12 E13 N1 B31
    Date: 2013–02
  5. By: Leopoldo Fergusson; Juan F. Vargas
    Abstract: This paper studies the effect of strengthening democracy, as captured by an increase in voting rights, on the incidence of violent civil conflict in nineteenth-century Colombia. Empirically studying the relationship between democracy and conflict is challenging, not only because of conceptual problems in defining and measuring democracy, but also because political institutions and violence are jointly determined. We take advantage of an experiment of history to examine the impact of one simple, measurable dimension of democracy (the size of the franchise) on conflict, while at the same time attempting to overcome the identification problem. In 1853, Colombia established universal male suffrage. Using a simple difference-indifferences specification at the municipal level, we find that municipalities where more voters were enfranchised relative to their population experienced fewer violent political battles while the reform was in effect. The results are robust to including a number of additional controls. Moreover, we investigate the potential mechanisms driving the results. In particular, we look at which components of the proportion of new voters in 1853 explain the results, and we examine if results are stronger in places with more political competition and state capacity. We interpret our findings as suggesting that violence in nineteenth-century Colombia was a technology for political elites to compete for the rents from power, and that democracy constituted an alternative way to compete which substituted violence.
    Date: 2013–03–03
  6. By: Olsson, Ola (Department of Economics, School of Business, Economics and Law, Göteborg University); Paik, Christopher (New York University)
    Abstract: While it is widely believed that regions which experienced a transition to Neolithic agriculture early also become institutionally and conomically more advanced, many indicators suggest that within the Western agricultural core (including Europe, North Africa, the Middle East, and Southwest Asia), communities that adopted agriculture early in fact have weaker institutions and poorly functioning economies today. In the current paper, we attempt to integrate both of these trends in a coherent historical framework. Our main argument is that countries that made the transition early also tended to develop autocratic societies with social inequality and pervasive rent seeking, whereas later adopters were more likely to have egalitarian societies with stronger private property rights. These di¤erent institutional trajectories implied a gradual shift of dominance from the early civilizations towards regions in the periphery. We document this relative reversal within the Western core by showing a robust negative correlation between years since transition to agriculture and contemporary levels of income and institutional development, on both the national and the regional level. Our results further indicate that the reversal had become manifest already before the era of European colonization.<p>
    Keywords: Neolithic agriculture; comparative development
    JEL: N50 O43
    Date: 2013–01–25
  7. By: Vidal-Robert, Jordi (University of Warwick)
    Abstract: The Spanish Inquisition (1478-1834) lasted for more than three centuries and conducted more than 100,000 trials. Why would the Spanish Crown adopt this type of repressive institution? What were the actual motives of its activity? This paper explores the role of the Spanish Inquisition as a repressive tool of the Spanish Crown. When the Crown had to move military resources abroad to fight a war, the likelihood of an internal revolt against the Crown increased. To minimize the threat of rebellion, the Crown would use the Inquisition to increase repression (trials) in Spain. In a theoretical framework, I show that while the Inquisition would conduct more trials the higher the intensity of the wars fought abroad, it would however decrease its level of repression (trials) if the likelihood of an internal revolt were large enough. This behavior indicates an inverse-U relationship between inquisitorial and war intensity. To test this prediction, I assemble time series data for seven Spanish inquisitorial districts on annual trials of the Inquisition and wars conducted by the Spanish Crown between 1478 and 1808. I show that there is an inverse-U relationship between wars and inquisitorial activity. My results are robust to the inclusion of data on the severity of the weather (droughts) and to adjustments for spillover e.ects from districts other than the main district under analysis. Moreover, using a new database of 35,000 trials of the Inquisition, I show that religious persecution was especially significant during early stages of the Inquisition, while repressive motives better explain its behavior in later periods.
    Date: 2013
  8. By: Tomoko Hashino, Keijiro Otsuka (Graduate School of Economics, Kobe University; National Graduate Institute for Policy Studies)
    Abstract: The development of the Fukui silk weaving district was curious because it became the largest industrial district of habutae, or plain silk, fabric production in Japan within a decade after it began operations in the late 1880s. Initially, the production of habutae rapidly spread geographically from the capital city to surrounding areas in the same prefecture. Fukui introduced power looms beginning in the mid-1900s, which was the earliest among Japanfs silk weaving districts. Production was first dominated by small family firms, but later by factories employing 10 or more workers. Interestingly, Fukuifs emphasis on weaving habutae gradually shifted, and a range of more sophisticated products emerged during the later stages of the silk industryfs development in the district. This study attempts to explore the causes of the rapid expansion and transformation of the Fukui silk weaving district and the effects on the size, location, structure, and labour productivity of weaving firms.
    Date: 2013–02
  9. By: Carlsson, Bo (Case Western Reserve University); Braunerhjelm, Pontus (Royal Institute of Technology); McKelvey, Maureen (Gothenburg University); Olofsson, Christer (University of Agriculture); Persson, Lars (Research Institute of Industrial Economics (IFN)); Ylinenpää, Håkan (Luleå Technical University)
    Abstract: Research on entrepreneurship has flourished in recent years and is evolving rapidly. This paper explores the history of entrepreneurship research, how the research domain has evolved, and its current status as an academic field. The need to concretize these issues stems partly from a general interest to define the current research domain, partly from the more specific tasks confronting the prize committee of the Global Award for Entrepreneurship Research. <p> Entrepreneurship has developed in many sub-fields within several disciplines – primarily economics, management/business administration, sociology, psychology, economic and cultural anthropology, business history, strategy, marketing, finance, and geography – representing a variety of research traditions, perspectives, and methods. We present an analytical framework that organizes our thinking about the domain of entrepreneurship research, by specifying elements, levels of analysis and the process/context. An overview is provided of where the field stands today and how it is positioned relative to the existing disciplines and new research fields upon which it draws. <p> Areas needed for future progress are highlighted, particularly the need for a rigorous dynamic theory of entrepreneurship that relates entrepreneurial activity to economic growth and human welfare. Moreover, applied work based on more careful design as well as on theoretical models yielding more credible and robust estimates seems also highly warranted.
    Keywords: Entrepreneurship research; Evolution; Academic disciplines; Global Award for Entrepreneurship Research
    JEL: B00 L26 M13 O10
    Date: 2013–01–02
  10. By: Lindenberger, Dietmar (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Kümmel, Reiner (Universität Würzburg, Theoretische Physik I)
    Abstract: Energy conversion in the production of goods and services, and the resulting emissions associated with entropy production, have not yet been taken into account by the mainstream theory of economic growth. Novel econometric analyses, however, have revealed energy as a production factor whose output elasticity, which measures its productive power, is much higher than its share in total factor cost. This, although being at variance with the notion of orthodox economics, is supported by the standard maximization of profit or time-integrated utility, if one takes technological constraints on capital, labor, and energy into account. The present paper offers an explanation of these findings in the picture of a sledge, which represents the economy, on the slope of a niveous mountain, which represents cost. Historical economic trajectories indicate that the representative entrepreneur at the controls of the sledge steers his vehicle with due regard of the barriers from the technological constraints, observing “soft” constraints, like the legal framework of the market, in addition. We believe that this perspective contributes to resolving the paradox that energy hardly matters in mainstream growth theory, whereas it is an issue of growing importance in international policy.
    Keywords: energy; economic growth; oil price; profit maximization; technological constraints; output elasticities
    JEL: O11 Q43
    Date: 2013–02–18
  11. By: Thierry Burger-Helmchen
    Abstract: Ce travail présente l’histoire de l’industrie des plates-formes électroniques de loisirs et les choix stratégiques des principaux fabricants de plates-formes, plus communément appelées consoles de jeux vidéo. Cette industrie que l’on qualifie de récente (mais qui a déjà plus d’un quart de siècle) a connu des modifications profondes dans sa structure concurrentielle. Pour analyser cette évolution et l’importance des choix stratégiques de certaines firmes sur la structure globale de l’industrie, nous proposons une application basée sur un modèle de simulation ‘History-friendly’. Dans ce travail nous présentons les principales équations du modèle de simulation, l’apport de ce type de modélisation, son application à l’industrie des consoles de jeux vidéo, les résultats et les enseignements que l’on peut en tirer en management stratégique.
    Keywords: Création d’options stratégiques, Industrie du jeu-vidéo, modèle de simulation History-Friendly.
    Date: 2013
  12. By: Lavelle, Kathryn C.
    Abstract: The World Bank's president has been an American by tradition. Yet little work has explored the consequences for this connection in influencing visions of development in the organization across time. This paper uses evidence from archives, congressional hearing records, and memoirs and histories of World Bank presidents to investigate United States-World Bank relations and development policy during four presidencies--Eugene Meyer, Eugene Black, Robert McNamara, and James Wolfensohn. The author argues that at times the political arrangements had the effect of pushing the Bank toward greater institutional independence from the United States, particularly when partisanship in American politics rose and new United States presidential administrations came into office with the World Bank president's term holding over from before. At other times, United States-World Bank connections pulled the Bank into foreign policy issues in the United States that the Bank might not otherwise have addressed when advocates pressed their case on Capitol Hill.
    Keywords: Banks&Banking Reform,Public Sector Corruption&Anticorruption Measures,Corporate Law,Access to Finance,Hazard Risk Management
    Date: 2013–03–01
  13. By: Kelly Vanessa Acuña Mantilla; Andrés Álvarez
    Abstract: El estudio de la circulación monetaria durante la llamada era de “banca libre” en Colombia (1865-1885) muestra patrones diferentes según las regiones. Este trabajo estudia la complementariedad y sustitución entre moneda metálica y billetes de bancos privados. Se pone en evidencia la existencia de mecanismos de sustitución entre monedas de oro y billetes bancarios para el caso de Antioquia mientras que en el caso de Bogotá no se puede afirmar que la evidencia sea concluyente. El patrón de comportamiento de la acuñación de moneda de plata por el contrario muestra complementariedad con el billete de banco en ambas regiones. Este trabajo concluye que una forma de Ley de Gresham particular se evidenció en Colombia. Se muestra evidencia que permitiría concluir que las diferencias regionales en el funcionamiento de este mecanismo se deben a la especialización de la región de Medellín (Estado de Antioquia) como mayor productor y exportador de oro, mientras que la economía bogotana se especializa en agricultura, servicios y artesanado.
    Date: 2013–01–31
  14. By: Alessandro Mengoni; Chiara Seghieri (Istituto di Management - Scuola Superiore Sant’Anna, Pisa); Sabina Nuti (Istituto di Management - Scuola Superiore Sant’Anna, Pisa)
    Abstract: Objectives. In recent years, there has been a growing interest in the development and application of discrete choice experiments (DCEs) within health economics. Even though the literature include several reviews of the methodology associated with conducting DCEs and analysing the resultant choice data, a detailed classification of the areas covered by DCEs is lacking. The aim of this paper is to provide, after a brief description of the most important phases of a DCE, a comprehensive categorization of the various areas in which DCEs in health care have been performed. Methods. A systematic literature review was conducted to identify published studies using stated preferences DCEs within a health context between January 1990 and May 2011. Results. 256 DCEs were included in the review. Compared to the 1990-2000 period, the number of DCEs has increased quickly, with experiments carried out in 30 different countries. A growing number of studies primarily investigated patients’ preferences during the years, collecting a greater number of responses in comparison to the baseline period. A significant proportion of publications estimated the benefits of health care services, like specialistic surgical and medical services, generic medical services, services for chronics and elderly people, maternity and childbirth services and diagnostic facilities. Nevertheless, DCEs has also been used to value health outcomes, examine preferences for pharmaceutical products, investigate labour-market choices as well as healthcare systems characteristics and health policies. Conclusions. This paper adds to the body of literature reviewing the growing stock of published DCEs in health economics, providing a new detailed taxonomy of the various areas in which such experiments have been applied. Together with the methodological refinements, future research should continue to explore new contexts of analysis.
    Keywords: choice experiments, review, areas of application, health economics
    JEL: I10
    Date: 2013–01–01
  15. By: Kevin Hoover
    Abstract: The potted histories of macroeconomics textbooks are typically Keynes-centric. Keynes is credited with founding macroeconomics, and the central developments in the field through the early 1970s, including large-scale macroeconometric models are usually termed “Keynesian.” The story of macroeconomics is framed as support or opposition (e.g., monetarism or the new classical macroeconomics) to Keynes. The real story is more complicated and involves at least two distinct threads. Keynes was important, but perhaps more important for the detailed development of the field were the early macroeconometricians – Ragnar Frisch and Jan Tinbergen. Frisch and Tinbergen adopted physical or mechanical metaphors in which aggregate quantities are central. Keynes’s vision of macroeconomics is better described as “medical.” It is based in human psychology and individual decision-making and sees the economy as an organic system. Whereas policymakers and economic advisers in Keynes view can operate only within the economic system, Frisch and Tinbergen laid the basis for an optimal-control approach to economic policy in which the policymaker stands outside the system. Recent new classical macroeconomics has adopted an uneasy amalgam of the medical and mechanical metaphors.
    Keywords: macroeconomics, Keynes, Frisch, Tinbergen, Klein, macroeconometric models, macroeconomic policy
    JEL: B22 B23
    Date: 2013–01
  16. By: Nicolas Gavoille (CREM CNRS UMR6211, Condorcet Center, University of Rennes 1, France)
    Abstract: This article introduces a new database focusing on the legislative production as well as the characteristics of the governments in France, from the early months of the Vth Republic in January 1959 to the end of the XIIIth legislature in March 2012. It provides a large amount of variables covering several aspects of the legislative production, classified in four different groups: composition of the governments, political constraints, institutional variables and legislative production. Most of the variables are observed at a monthly rate.
    Keywords: Economic theory of legislation, Legislative production function, Political fragmentation, Political Legislation Cycle
    JEL: Y10 H69 D72
    Date: 2013–01

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