New Economics Papers
on Business, Economic and Financial History
Issue of 2013‒07‒05
seventeen papers chosen by

  1. SAVINGS and economic growth: a historical analysis of the relationship between savings and economic growth in the CAPE Colony economy, 1850-1909. By Verhoef, Grietjie; Greyling, Lorraine; Mwamba, John
  2. Lending to Lemons: Landschafts-Credit in 18th Century Prussia By Kirsten Wandschneider
  3. Trends in Health, Education and Income in the United States, 1820-2000 By Hoyt Bleakley; Dora Costa; Adriana Lleras-Muney
  4. Language integration of labour migrants in Austria, Belgium, France, Germany, the Netherlands and Sweden from a historical perspective By Höhne, Jutta
  5. The impact of investment in education on economic development: Spain in comparative perspective (1860-2000) By Enriqueta Camps
  6. The Selection Bias in Court Records: Settlement and Trial in Eighteenth Century Kastamonu By Metin M. Cosgel; Bogac A. Ergene
  7. A Retrospective Review of Shale Gas Development in the United States: What Led to the Boom? By Wang, Zhongmin; Krupnick, Alan
  8. La genèse de l’hypermarché : est-il vraiment français d’origine ? By Yves Soulabail
  9. Up from Poverty? The 1832 Cherokee Land Lottery and the Long-run Distribution of Wealth By Hoyt Bleakley; Joseph P. Ferrie
  10. Marginal Tax Rates and Income: New Time Series Evidence By Karel Mertens
  11. Convergence, income distribution, and the economic crisis in Europe By Kaitila, Ville
  12. Developmental state in Korea (60-70ties) revisited: Institution-building for the making of 'coordinated market' By Park, Sung-Jo
  14. Rural finance, development and livelihoods in China By Zhang, Heather Xiaoquan; Loubere, Nicholas
  15. The Effect of Medicaid Expansions in the Late 1980s and Early 1990s on the Labor Supply of Pregnant Women By Dhaval M. Dave; Sandra L. Decker; Robert Kaestner; Kosali Ilayperuma Simon
  16. Patenteamento em Biotecnologias: Experiência Chinesa By Graziela Ferrero Zucoloto
  17. Expanding social insurance coverage in urban China By Giles, John; Wang, Dewen; Park, Albert

  1. By: Verhoef, Grietjie; Greyling, Lorraine; Mwamba, John
    Abstract: Abstract The sub-optimal savings propensity in South Africa the past three decades causes concern for the ability of the country to support its economic development. An historical analysis of the development of the savings’ trends in South Africa may assist in understanding the historical roots of the phenomenon. Apart from general descriptions of the nature of economic activity in the Cape Colony very little is known about the role financial sector development and savings played in the growing colonial economy. This paper explores the performance of the economy of the Cape Colony between 1850 and 1909, through the business cycles, financial sector stability, the nature and extent of economic activity and seeks to explain the relationship between savings and economic growth. The question is whether the general view that ‘financial development is robustly growth promoting’ can be substantiated in the last half of the nineteenth century Cape Colony? It contributes to the economic history literature on the colonial past of South Africa by using newly compiled data on the GDP of the Cape Colony during the last half of the nineteenth century. The paper finds that despite the expectations in the literature that financial deepening contributes to economic growth; the Cape Colony did not display such causal relationship between savings and economic growth in the period under review. The paper shows the different forms of savings in the colony and the trend of savings behavior in the period amidst the development of a relatively robust financial sector.
    Keywords: Keywords: Cape colony, economic growth, financial deepening, gross domestic product, savings.
    JEL: N27
    Date: 2013–06–22
  2. By: Kirsten Wandschneider
    Abstract: The following paper describes the emergence of cooperative mortgage credit associations, called "Landschaften" in 18th century Prussia, and thereby tells the history of mortgage-covered bonds. Landschaften facilitated the refinancing of loans for Prussian estates by issuing covered bonds (Pfandbriefe) that were jointly backed by their members. They relied on dual recourse, cooperative structure, joint liability, and local administration to overcome asymmetric information problems related to lending. Their emergence serves as an example for financial innovation in historical mortgage markets. Pfandbriefe exist to this day and are known for their security. Their success goes back to some of the historical features.
    JEL: G21
    Date: 2013–06
  3. By: Hoyt Bleakley; Dora Costa; Adriana Lleras-Muney
    Abstract: We document the correlations between early childhood health (as proxied by height) and educational attainment and investigate the labor market and wealth returns to height for United States cohorts born between 1820 and 1990. The 19th century was characterized by low investments in height and education, a small correlation between height and education, and positive but small returns for both height and education. The relationship between height and education was stronger in the 20th century and stronger in the first part of the 20th century than later on (when both investments in education and height stalled), but never as strong as in developing countries. The labor market and wealth returns to height and education also were higher in the 20th compared to the 19th century. We relate our findings to the theory of human capital formation and speculate that the greater importance of physical labor in the 19th century economy, which raised the opportunity cost of schooling, may have depressed the height-education relationship relative to the 20th century. Our findings are consistent with an increasing importance of cognitive abilities acquired in early childhood.
    JEL: I0
    Date: 2013–06
  4. By: Höhne, Jutta
    Abstract: The paper investigates the language integration of adult labour migrants in six major West-European immigration countries (Austria, Belgium, France, Germany, the Netherlands and Sweden) for the period between 1965 and the mid-1990s. Results reveal quite different national approaches to the problem. Whereas in Sweden, France and Germany, migrants' linguistic integration was addressed by state authorities well ahead of establishing integration policy as a governmental task, the other countries under study ignored immigrants' possible language problems until the early or even late 1980s. Compared to the intense and sophisticated contemporary integration courses, the didactic quality of language courses taught between the 1960s-1990s was overall rather poor, and course durations were quite short. Best-practice standards had been set since the early years of labor migration by Sweden where the government financed language courses already from 1965 on. The countries (the Netherlands, Belgium and Austria) that were already reluctant in the early years to set up language courses for immigrants still provide comparably less state-funded language tuition to immigrants today. -- Das vorliegende Paper untersucht die sprachliche Integration von Arbeitsmigranten in sechs westeuropäischen Einwanderungsländern (Österreich, Belgien, Frankreich, Deutschland, Niederlande und Schweden) zwischen 1965 und Mitte der 1990er Jahre. Die Ergebnisse belegen, dass die Länder sehr unterschiedlich an dieses Problem herangingen: Die Behörden in Schweden, Frankreich und Deutschland befassten sich mit der sprachlichen Integration von Migration bereits lange bevor von einer staatlichen Integrationspolitik die Rede sein konnte. Die Niederlande, Belgien und Österreich hingegen ignorierten mögliche Verständigungsprobleme von Migranten bis in die frühen oder sogar späten 1980er Jahre hinein. Gemessen an den heutigen intensiven und didaktisch ausgefeilten Integrationskursen ließ die Unterrichtsqualität in den sechziger bis neunziger Jahren deutlich zu wünschen übrig. Auch die Dauer der Sprachkurse war bescheiden. Schweden finanzierte Sprachunterricht für Einwanderer schon seit 1965 und setzt seit Beginn der Arbeitsmigration nach Westeuropa bis heute die höchsten Standards in Bezug auf Kursangebote und Unterrichtsqualität, während die Länder, die schon bei der Einführung von Sprachkursen sehr zögerlich waren (Niederlande, Belgien und Österreich), sich auch jetzt nur vergleichsweise wenig engagieren, wenn es darum geht, Sprachunterricht für Migranten zu finanzieren.
    Date: 2013
  5. By: Enriqueta Camps
    Abstract: Throughout the 19th century and until the mid-20th century, in terms of long-term investment in human capital and, above all, in education, Spain lagged far behind the international standards and, more specifically, the levels attained by its neighbours in Europe. In 1900, only 55% of the population could read; in 1950, the figure was 93%. This no doubt contributed to a pattern of slower economic growth in which the physical strength required for agricultural work, measured here through height, had a larger impact than education on economic growth. It was not until the 1970s, with the arrival of democracy, that the Spanish education system was modernized and the influence of education on economic growth increased.
    Keywords: employment structure, human capital, educational offer, economic growth.
    JEL: I2 I1 J3 J8 N3
    Date: 2013–06
  6. By: Metin M. Cosgel (University of Connecticut); Bogac A. Ergene (University of Vermont)
    Abstract: Court records are used extensively in historical research. Preserved as summaries of daily legal proceedings, they give historians a unique opportunity of access to the information about the names, personal characteristics, and socio-economic status of individuals and about the laws, local customs, and legal institutions that were used in resolving disputes. Although researchers have thoroughly discussed the limitations of these records in accurately reflecting court proceedings, the problem of selection bias has not been systematically studied. Since litigants would likely settle disputes in which one side is likely to be a clear winner, the cases that go to trial would likely be the difficult and uncertain ones for which there is greater disagreement, altogether comprising a non-random and unrepresentative subset of all disputes. We study the selection bias in Ottoman courts in the town of Kastamonu in northern Anatolia, from the late seventeenth and the eighteenth centuries. We separate disputes by type and study the distribution of court participants according to size, gender, and religious and socioeconomic status. We run regression analysis to determine the factors affecting the likelihood of cases being tried in court. Our results indicate that the cases that wound up in court were selected systematically. If the selection bias is ignored, research based on Ottoman court records may be seriously flawed in its ability to yield general conclusions.
    Keywords: court record, Islamic law, legal system, selection bias, Ottoman Empire, Kastamonu, litigation, settlement, trial
    JEL: D3 D6 E3 E6 I3 J1 N3 N9 O53
    Date: 2013–06
  7. By: Wang, Zhongmin (Resources for the Future); Krupnick, Alan (Resources for the Future)
    Abstract: This is the first academic paper that reviews the economic, policy, and technology history of shale gas development in the United States. The primary objective of the paper is to answer the question of what led to the shale gas boom in the United States to help inform stakeholders in those countries that are attempting to develop their own shale gas resources. This paper is also a case study of the incentive, process, and impact of technology innovations and the role of government in promoting technology innovations in the energy industry. Our review finds that government policy, private entrepreneurship, technology innovations, private land and mineral rights ownership, high natural gas prices in the 2000s, and a number of other factors all made important contributions to the shale gas boom.
    Keywords: shale gas, policy, research and development, technology, hydraulic fracturing, horizontal drilling
    JEL: Q4 O3 L71
    Date: 2013–04–24
  8. By: Yves Soulabail (CREM CNRS, UMR 6211, University of Rennes 1, France)
    Abstract: The “French” hypermarket was presented in 1963 as an innovative combination of the most prominent characteristics of modern retailing of that time. This paper describes the story of this retail concept and how it crossed the Atlantic Ocean before being diffused throughout Europe. It is by and large known that it was firstly implemented in France, but we show that it was actually done in Belgium. We analyze this phenomenon of national appropriation of this concept by Carrefour.
    Keywords: Carrefour, France, hypermarket, retailing wheel, retail life cycle
    Date: 2013–06
  9. By: Hoyt Bleakley; Joseph P. Ferrie
    Abstract: The state of Georgia allocated most of its land to the public through a system of lotteries. These episodes provide unusual opportunities to assess the long-term impact of large shocks to wealth, as winning was uncorrelated with individual characteristics and participation was nearly universal among the eligible population of adult white male Georgians. We use this episode to examine the idea that the lower tail of the wealth distribution reflects in part a wealth-based poverty trap because of limited access to capital. Using wealth measured in the 1850 Census manuscripts, we follow up on a sample of men eligible to win in the 1832 Cherokee Land Lottery. We assess the impact of lottery winning on the distribution of wealth 18 years after the fact. Winners are on average richer (by an amount close to the median of 1850 wealth), but mainly due to a (net) shifting of mass from the middle to the upper tail of the wealth distribution. The lower tail is largely unaffected.
    JEL: D31 I38 J01 J24 J62 N31 O15
    Date: 2013–06
  10. By: Karel Mertens
    Abstract: This paper estimates the dynamic effects of marginal tax rate changes on income reported on tax returns in the United States over the 1950-2010 period. After isolating exogenous variation in average marginal tax rates in structural vector autoregressions using a narrative identification approach, I find large positive effects in the top 1% of the income distribution. In contrast to earlier findings based on tax return data, I also find large effects in other income percentile brackets. A hypothetical tax reform cutting marginal rates only for the top 1% leads to sizeable increases in top 1\% incomes and has a positive effect on real GDP. There are also spillover effects to incomes outside of the top 1%, but top marginal rate cuts lead to greater inequality in pre-tax incomes.
    JEL: E6 E62 H2 H24
    Date: 2013–06
  11. By: Kaitila, Ville
    Abstract: We analyse the Sigma convergence (standard deviation divided by average) of purchasing power adjusted GDP per capita and GDP per hour worked in the European Union. We also link the development in income distribution as measured by Gini coefficients to convergence. With short pauses, there has been a long term trend of GDP per capita convergence in the European Union after 1960. The Great Recession was a shock to the development, and convergence within the EU-15 has suffered considerably. The largest relative declines have occurred in Cyprus, Greece, Italy, Portugal and Spain. On the other hand, the ex-transition countries have mostly continued their catching up. Historically, convergence in the EU has been faster when aggregate GDP growth has been faster. We also find that income disparities measured by Gini coefficients are negatively related to GDP per capita levels. Convergence was not correlated with changes in income distribution in 2000–2011 except for a group of six catching-up countries where we find a positive relation. We also find that there has occurred Sigma convergence in national Gini coefficients
    Keywords: EU, GDP per capita, productivity, Sigma convergence, Gini coefficient
    JEL: F15 F43 O15 O47
    Date: 2013–06–17
  12. By: Park, Sung-Jo
    Abstract: The paper attempts to decribe and analyze institutiononal and strategic variables for the success of developmental state under the Park Regime in the 60-70ties in Korea. Particular accent was placed on economic planning and its implementation supported by rationality-centered bureaucrats and foreign capital inducement. Mention was made about the exportled development strategy combined with the unbalanced growth model which resulted in severe regional development gap. A noteworty strategy by the Park regime was to bring up Chaebols as development actors which contributed to a successful model of technology-intensive heavy and chemical industries. --
    Keywords: developmental state,planning,import substitution,chaebols,unbalanced growth
    Date: 2013
  13. By: Ho Fai Chan; Benno Torgler
    Abstract: Nobel laureates have achieved the highest recognition in academia,reaching the boundaries of human knowledge and understanding. Owing to past research, we have a good understanding of the career patterns behind their performance. Yet, we have only limited understanding of the factors driving their recognition with respect to major institutionalized scientific honours. We therefore look at the award life cycle achievements of the 1901 to 2000 Nobel laureates in physics, chemistry and physiology or medicine. The results show that Nobelists with a theoretical orientation are achieving more awards than laureates with an empirical orientation. Moreover, it seems their educational background shapes their future recognition. Researchers educated in Great Britain and the US tend to generate more awards than other Nobelists although there are career pattern differences. Among those, laureates educated at Cambridge or Harvard are more successful in Chemistry, those from Columbia and Cambridge excel in Physics, while Columbia educated laureates dominate in Physiology or Medicine.
    Keywords: Nobel Prize, Nobel Laureates, Awards, Recognition, Educational Background, Theory, Empirics, Chemistry, Physics, Physiology or Medicine
    JEL: M52 J33 Z13
    Date: 2013–06–24
  14. By: Zhang, Heather Xiaoquan; Loubere, Nicholas
    Abstract: Establishing an inclusive financial system with comprehensive and accessible services in rural areas is increasingly promoted as a crucial element for socio-economic development both in China and globally. Yet, in existing research on China's agricultural and rural development, relatively less attention has been paid to the ways in which changes in the provision of rural finance have impacted the livelihoods of individuals, families and communities from the perspectives of local people. This paper intends to contribute to our understanding of the relationship between rural finance and development by delineating a recent history of financial service extension to rural areas since the founding of the People's Republic of China in 1949. We analyse, in particular, the accelerated pace of the expansion and diversification of such services together with a deeper penetration of the so-called 'microfinance industry' in rural China since the mid-2000s. We analyse the major actors and dynamics involved, the strengths and weaknesses in current scholarship, and suggest ways forward in order to deepen our understanding of the relationship between rural finance, development and the livelihoods in China and beyond. --
    Keywords: rural financial services,financial extension and diversification,urban-rural integration,microcredit,livelihoods,China
    Date: 2013
  15. By: Dhaval M. Dave; Sandra L. Decker; Robert Kaestner; Kosali Ilayperuma Simon
    Abstract: A substantial body of research has found that expansions in Medicaid eligibility increased enrollment in Medicaid, reduced the rate of uninsured, and reduced the rate of private health insurance coverage (i.e., crowd out). Notably, there has been little research that has examined the mechanism by which crowd-out occurs. This study examines the effects of expansions in Medicaid eligibility for pregnant women in the late 1980s and the early 1990s on labor supply, which is one of the possible mechanisms underlying crowd out. Estimates suggest that the 20 percentage point increase in Medicaid eligibility during the sample period was associated with a 6% to 7% decrease in the probability that a woman who gave birth in the past year was employed. Among unmarried women with less than a high school education, the change in Medicaid eligibility reduced employment by approximately 13% to 16%.
    JEL: D1 J01 J08 J22
    Date: 2013–06
  16. By: Graziela Ferrero Zucoloto
    Abstract: Este trabalho tem por objetivo mapear questões relativas ao patenteamento em biotecnologias na China. Apresenta a evolução histórica das áreas em biotecnologias no país, destacando o apoio governamental ao segmento. Discute as principais mudanças na legislação de patentes chinesa e detalha as matérias patenteáveis em biotecnologias, comparando-as às de outros países selecionados. Apresenta levantamento estatístico das patentes biotecnológicas concedidas no United States Patent and Trademark Office (Uspto), caracterizando-as de acordo com os titulares e inventores. Com base nesta discussão, apresenta as considerações finais. This paper aims to mapping the biotechnological regulatory aspects in China. It presents the historical evolution of biotechnologies in the country, focusing on the public support to the area. It discusses the main changes on Chinese Patent Law and details the patentable subject on biotechnologies, comparing them to selected countries. It presents a statistical analysis of granted patents on USPTO, characterizing them by owners, inventors and international codes of patents related to biotechnologies. Based on this discussion, it presents the final conclusions.
    Date: 2013–06
  17. By: Giles, John; Wang, Dewen; Park, Albert
    Abstract: This paper first reviews the history of social insurance policy and coverage in urban China, documenting the evolution in the coverage of pensions and medical and unemployment insurance for both local residents and migrants, and highlighting obstacles to expanding coverage. The paper then uses two waves of the China Urban Labor Survey, conducted in 2005 and 2010, to examine the correlates of social insurance participation before and after implementation of the 2008 Labor Contract Law. A higher labor tax wedge is associated with a lower probability that local employed residents participate in social insurance programs, but is not associated with participation of wage-earning migrants, who are more likely to be dissuaded by fragmentation of the social insurance system. The existing gender gap in social insurance coverage is explained by differences in coverage across industrial sectors and firm ownership classes in which men and women work.
    Keywords: Health Economics&Finance,Insurance&Risk Mitigation,Social Protections&Assistance,Pensions&Retirement Systems,Wages, Compensation&Benefits
    Date: 2013–06–01

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