New Economics Papers
on Business, Economic and Financial History
Issue of 2013‒09‒06
thirteen papers chosen by

  1. Historical Origins of Environment Sustainability in the German Chemical Industry, 1950s-1980s By Geoffrey G. Jones; Christina Lubinski
  2. Gibrat's law and the British Industrial Revolution By Alexander Klein; Tim Leunig
  3. 'Midas, transmuting all, into paper': the Bank of England and the Banque de France during the Napoleonic Wars By Jagjit S.Chadha; Elisa Newby
  4. Bioeconomic factors of natural resource transitions: The US sperm whale fishery of the 19th century By Brooks A. Kaiser
  5. The transmission of longevity across generations: The case of the settler Cape Colony By Patrizio Piraino; Sean Muller; Jeanne Cilliers; Johan Fourie
  6. Was the African American great migration delayed by outlawing emigrant agents? By Kha Yen Prentice; László Kónya; David Prentice
  7. O "Elo Perdido" Entre a Organização Mundial do Comércio e o Fundo Monetário Internacional By Vera Thorstensen; Daniel Ramos; Carolina Muller
  8. Testing for Multiple Bubbles 1: Historical Episodes of Exuberance and Collapse in the S&P 500 By Peter C. B. Phillips; Shu-Ping Shi; Jun Yu
  9. The Evolution of Knowledge Organization: The Emergence of Innovation Platform in the Turin Car System. By Patrucco, Pier Paolo
  10. Rediscutindo a Delimitação das Regiões Metropolitanas no Brasil: Um Exercício a Partir dos Critérios da Década de 1970 By Maria Luisa G. Castello Branco; Rafael Henrique Moraes Pereira; Vanessa Gapriotti Nadalin
  11. Path Dependent Patterns of Persistence in Productivity Growth. By Antonelli Cristiano; Crespi, Francesco; Scellato, Giuseppe
  12. Publication activity in the Science Citation Index Expanded (SCIE) database in the context of Chinese science and technology policy from 1977 to 2012 By Fu, Junying; Frietsch, Rainer; Tagscherer, Ulrike
  13. Immigration and property prices: Evidence from England and Wales By Braakmann, Nils

  1. By: Geoffrey G. Jones (Harvard Business School, General Management Unit); Christina Lubinski (German Historical Institute)
    Abstract: This working paper examines the growth of corporate environmentalism in the West German chemical industry between the 1950s and the 1980s. It focuses on two companies, Bayer and Henkel and traces the evolution of their environmental strategies in response to growing evidence of pollution and resulting political pressures. Although German business has been regarded as pioneering corporate environmentalism, this study reveals major commonalities between the German and American chemical industries until the 1970s, when the two German firms diverged from their American counterparts in using public relations strategies not only to contain fallout from criticism, but also as opportunities for changes in corporate culture. The working paper finds no evidence for variety of capitalism explanations why German firms should have been early in their sustainability strategies, partly because of the importance of regional as opposed to national influences, but the study is supportive of organizational sociology theories which have identified the importance of visibility in corporate green strategies.
    Keywords: environmental strategies, corporate responsibility, sustainability, chemical industry, detergents, Germany
    Date: 2013–08
  2. By: Alexander Klein; Tim Leunig
    Abstract: This paper examines Gibrat’s law in England and Wales between 1801 and 1911 using a unique data set covering the entire settlement size distribution. We find that Gibrat’s law broadly holds even in the face of population doubling every fifty years, an industrial and transport trevolution, and the absence of zoning laws to constrain growth. The result is strongest for the later period, and in counties most affected by the industrial revolution. The exception were villages in areas bypassed by the industrial revolution. We argue that agglomeration externalities balanced urban disamenities such as commuting costs and poor living conditions to ensure steady growth of many places, rather than exceptional growth of few.
    Keywords: Gibrat’s law; city-size distribution; industrial revolution
    JEL: N93 R12
    Date: 2013–08
  3. By: Jagjit S.Chadha; Elisa Newby
    Abstract: This paper assesses Revolutionary and Napoleonic wartime economic policy. Suspension of gold convertibility in 1797 allowed the Bank of England to nurture British monetary orthodoxy. The Order of the Privy Council suspended gold payments on Bank of England notes and afforded simultaneous protection to the government and the Bank in pursuit of the conflicting goals of price stability and war finance. The government, the Bank of England and the commercial banks formed a loose alliance drawing on due political and legal processes and also paid close attention to public opinion. We suggest that the ongoing solvency of the Bank of England was facilitated by suspension and allowed the Bank to continue to make substantial profits throughout the Wars. It became acceptable for merchants to continue to trade with non-convertible Bank of England notes and for the government to finance the war effort, even with significant recourse to unfunded debt. These aspects combined to create a suspension of convertibility that did not undermine the currency. By contrast, the Assignats debacle had cost the French monetary system its reputation in the last decade of the 18th century and so Napoleonic finance had to evolve within a more rigid and limiting framework.
    Keywords: Monetary Orthodoxy; Suspension of Convertibility; War Finance
    JEL: C61 E31 E4 E5 N13
    Date: 2013–09
  4. By: Brooks A. Kaiser (Department of Environmental and Business Economics, University of Southern Denmark)
    Abstract: This paper uses bio-economic modeling and simulation to investigate the de-mise of the sperm whale industry in the mid-19th century. Petroleum is widely credited both contemporaneously and today with ‘saving the whales.’ We in-vestigate the transition in illumination technologies from whale oil to petroleum as a stochastic dynamic process in which there is uncertainty over the parameters of the fishery and the timing of available substitutes for sperm oil in order to determine the effect on the whale population. Using new biological analysis of the sperm whale fishery (Whitehead, 2002) and insights from natural resource economics we show that under most economic conditions the dynamics, even without a substitute, would have prevented extinction; this result is notably different, for economic and biological reasons, than that usually determined for the better studied baleen whales. This research builds on a long history of understanding the whale fisheries, particularly Davis et al. (1988) and related work, integrating new scientific and economic evidence.
    Date: 2013–04
  5. By: Patrizio Piraino (Department of Economics, University of Cape Town); Sean Muller (Department of Economics, University of Cape Town); Jeanne Cilliers (Department of Economics, University of Stellenbosch); Johan Fourie (Department of Economics, University of Stellenbosch)
    Abstract: The literature on parent-child correlations in socioeconomic status provides little evidence on long-term multigenerational dynamics. This is because most studies of intergenerational status persistence are based on two (at most three) successive generations. Our analysis adds to the intergenerational mobility literature by studying the correlation in longevity across multiple generations of a historical population. By using information on birth and death dates of eighteenth and nineteenth century settlers in South Africa’s Cape Colony, we are able to estimate the intergenerational transmission of longevity, which is found to be positive and significant. Our analysis confirms one of the most consistent findings in the social sciences: the correlation between the status of parents and that of their offspring is positive and significant.
    Keywords: intergenerational mobility, persistence, social mobility, inequality, genealogical, Cape Colony
    JEL: J62 N37
    Date: 2013
  6. By: Kha Yen Prentice (School of Economics, La Trobe University); László Kónya (School of Economics, La Trobe University); David Prentice (School of Economics, La Trobe University)
    Abstract: The question of why more African Americans did not migrate earlier out of the stagnant and repressive South after emancipation remains open. Previous work has highlighted the role of demand and supply conditions. At the time, though there was much concern about the role of emigrant agents who actively recruited African Americans to migrate away from their homes such that several states introduced emigrant agent laws to effectively drive them out of business. In this paper we provide the first estimates of the quantitative significance of these agents to African American migration. Specifically, we take advantage of a natural experiment provided by different outcomes in court cases in Georgia and Alabama, which resulted in Alabama being prevented from re-introducing these laws between 1882 and 1903 while Georgia's laws remained. Analyzing gross migration out of the two states, we find that the emigrant agent laws had no direct effect on migration. Though there is some limited evidence that the sensitivity of migration flows to economic differences within the South was lower if an emigrant agent law was in place. This suggests that small changes to the emigrant agentlaws are unlikely to have led to an earlier Great Migration. Interestingly we also find that the increase in migration began before 1920 which provides some support for the supply-based explanations.
    Keywords: Great Migration, Emigrant Agents, Gravity Models, African Americans, Southern Labor Markets, Labor Market Regulation.
    JEL: N31 N41 N91 K31 J61 R23
    Date: 2013
  7. By: Vera Thorstensen; Daniel Ramos; Carolina Muller
    Abstract: Um dos principais objetivos das negociações de Bretton Woods era o de garantir o controle estrito sobre medidas de desvalorização cambial competitiva, que haviam potencializado os danos da crise econômica da década de 1930. O sistema de paridades cambiais fixas foi criado, representando um elo entre o sistema financeiro internacional e o sistema de comércio internacional, garantindo, a este, a neutralidade da questão cambial. O presente texto analisa como as revoluções sofridas pelo Fundo Monetário Internacional (FMI) acabaram por representar a perda deste elo, e discute as consequências para o atual funcionamento da Organização Mundial do Comércio (OMC). One of the main objectives of the Bretton Woods negotiations was to guarantee the firm control over competitive exchange rate devaluations, which had worsened the effects of the economic crisis of the 1930s. The par value exchange rate system was thus created, representing a link between the international financial system and the international trading system, guaranteeing, to the latter, the neutrality of the currency issue. The present article analyses how the institutional revolutions suffered by the IMF ended up representing the loss of this link and discusses its consequences to the WTO.
    Date: 2013–08
  8. By: Peter C. B. Phillips (Yale University, University of Auckland, University of Southampton & Singapore Management University); Shu-Ping Shi (The Australian National University); Jun Yu (Singapore Management University)
    Abstract: Recent work on econometric detection mechanisms has shown the effectiveness of recursive procedures in identifying and dating financial bubbles. These procedures are useful as warning alerts in surveillance strategies conducted by central banks and fiscal regulators with real time data. Use of these methods over long historical periods presents a more serious econometric challenge due to the complexity of the nonlinear structure and break mechanisms that are inherent in multiple bubble phenomena within the same sample period. To meet this challenge the present paper develops a new recursive flexible window method that is better suited for practical implementation with long historical time series. The method is a generalized version of the sup ADF test of Phillips, Wu and Yu (2011, PWY) and delivers a consistent date-stamping strategy for the origination and termination of multiple bubbles. Simulations show that the test significantly improves discriminatory power and leads to distinct power gains when multiple bubbles occur. An empirical application of the methodology is conducted on S&P 500 stock market data over a long historical period from January 1871 to December 2010. The new approach successfully the well-known historical episodes of exuberance and collapse over this period, whereas the strategy of PWY and a related CUSUM dating procedure locate far fewer episodes in the same sample range.
    Keywords: Date-stamping strategy; Flexible window; Generalized sup ADF test; Multiple bubbles, Rational bubble; Periodically collapsing bubbles; Sup ADF test;
    JEL: C15 C22
    Date: 2013–08
  9. By: Patrucco, Pier Paolo (University of Turin)
    Abstract: The paper aims at explaining the changes in how economic actors and their organizations acquire and coordinate innovative and productive capabilities. Through the illustrative evidence of organizational change occurred in the automobile industry in the area of Turin over the last 50 years, the paper describes how transformations in the structure of interactions between firms are steered by the modification in the pattern of specialization and differentiation in the capabilities and technological skills of economic actors. The automobile system in Turin is characterized by the emergence of a distributed innovation platform, which is seen as a major innovation in the organization of innovation and technological knowledge in the system.
    Date: 2013–07
  10. By: Maria Luisa G. Castello Branco; Rafael Henrique Moraes Pereira; Vanessa Gapriotti Nadalin
    Abstract: Desde a Constituição Federal de 1988 (CF/1988) os governos estaduais assumiram a atribuição de instituir suas próprias regiões metropolitanas (RMs). Em geral, há pouca informação acerca dos critérios utilizados para justificar a delimitação dos municípios pertencentes ao perímetro metropolitano dessas regiões. Como consequência, não é possível avaliar os prós e contras das metodologias utilizadas. Além disso, ficam comprometidas as análises comparativas acerca do desempenho de indicadores sociais e econômicos nessas áreas. A discussão de uma metodologia única para delimitação de RMs no Brasil vem num momento oportuno, uma vez que, no Congresso Nacional, está tramitando um projeto de lei sobre este tema (conhecido como Estatuto da Metrópole). Visando contribuir neste debate, este estudo simula quais seriam as RMs estimadas para o Brasil no ano de 2010 caso fosse aplicado um único conjunto de critérios, seguindo-se uma mesma metodologia para todo o país. Neste exercício, foram adotados como referência os mesmos critérios utilizados na década de 1970 para definição das nove primeiras RMs brasileiras com pequenas adaptações. Os resultados da simulação são comparados àquelas RMs estaduais reconhecidas oficialmente na data do Censo Demográfico 2010 e àquelas primeiras RMs oficializadas na década de 1970. Em comparação às RMs estaduais oficiais de 2010, os resultados obtidos apresentam um “Brasil metropolitano” composto por i) um menor número de RMs; ii) englobando em torno da metade do número de municípios; iii) com maior nível de integração por deslocamentos casa-trabalho; iv) uma área territorial cerca de três vezes mais compacta e mais densa; e ainda v) com mínimas diferenças em termos de porte populacional e econômico. Since the National Constitution of 1988, state governments are responsible for defining their own metropolitan areas in Brazil. However, the criteria for boundaries delimitation are not clearly defined as a rule. As a consequence, it is not possible to weigh the pros and cons of the employed methodologies. Furthermore, comparative analysis on the performance of social and economic indicators in these metropolitan areas can . be compromised as result of using multiple methodologies for defining territorial limits. The discussion of this issue could not be more timely, as the National Congress is currently debating a bill (aka Statute of the Metropolis) that proposes one single method for defining national metropolitan areas and its boundaries. To contribute to this debate, we estimate in this paper the metropolitan areas Brazil would have in 2010 by applying to the whole country the same criteria and following one single method. For this purpose, we have adopted the same method and criteria originally used for the definition of the first metropolitan areas of the country in the 1970’s, with minor adjustments. The obtained results are then compared with the official metropolitan areas showing rather different figures. Compared with official areas, our estimates show a metropolitan Brazil i) comprising a smaller number of metropolitan areas; ii) covering about half the number of municipalities; iii) with stronger commuting ties; iv) occupying a land area about three times more compact and dense; and yet v) with minor differences in terms of population size and GDP.
    Date: 2013–08
  11. By: Antonelli Cristiano; Crespi, Francesco; Scellato, Giuseppe (University of Turin)
    Abstract: This paper contributes to the analysis of the persistence of firm productivity, here measured by the total factor productivity (TFP), and highlights its path dependent characteristics. The study contributes to the literature on persistence in productivity along four main lines. First, it develops a conceptual framework that links the persistence in productivity performance to persistence at the firm level in innovative activities, which include the adoption and imitation of innovations introduced by third parties. Second, it shows how the internal characteristics of companies, including the propensity of managers to leverage dynamic capabilities, can shape the dynamics of the process. Third, it confirms that external factors, such as the access to local pools of knowledge and the dynamics of economic activity, have relevant effects on persistence and shape its evolution along its path. Fourth, the use of Multiple Transition Probability Matrices (MTPMs) and the subsequent econometric analysis provides substantial evidence on the relevance of the crucial distinction, within non-ergodic dynamics, between past dependent processes, characterized by full hysteretic irrever sibility, and path dependent processes in which events that take place along the process may affect its direction and pace.
    Date: 2013–05
  12. By: Fu, Junying; Frietsch, Rainer; Tagscherer, Ulrike
    Abstract: It is well known that the number of China's publications has increased at a remarkable rate over the last three decades. However, many related issues still remain unknown, like the scientific impact of those papers, the journals in which Chinese scientists publish their papers, and the relationship between the trend of China's publication activity and its S&T policy as well as other related governance issues. By using bibliometric methods, this paper finds that China's citation number which ranks fourth worldwide does not run parallel to the publication number that ranks second in the SCIE data-base, implying its publications haven't had the impact that was expected. Its citation rate ranks 78th though it has increased steadily. China's publications are mostly published in the lower impact journals but they attract more citations than the journals' expected values. China's S&T related inputs, including funding and personnel, have ex-hibited remarkable increasing trends during the four stages of S&T policies since 1977. Besides S&T investments, utilitarian practice nationwide may partly be responsible for the tremendous increase of SCI papers, especially when the performance-based evaluation system is mostly employed. It is essential to create a flexible environment and promote a scientific spirit combined with developing broader and more plural forms of the S&T assessment system, which would make developing an innovation country more realistic for China. --
    Date: 2013
  13. By: Braakmann, Nils
    Abstract: This paper investigates the link between immigration and property prices in England and Wales. Evidence from fixed effects and shift-share-based instrumental variable regressions suggests that an increase in the regional share of migrants (a) decreases prices at the lower end of the distribution up to the median and (b) has (almost) no effect on mean property prices or prices above the median. I also provide evidence on two mechanisms that explain these effects: (c) natives move out of regions as immigration increases and (d) the number of persons per room increases with the share of immigrants.
    Keywords: immigration; property prices; housing market; England; Wales
    JEL: J15 R21 R31
    Date: 2013–08–29

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