nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2015‒07‒11
sixteen papers chosen by

  1. Adaptation Strategies of Multinational Corporations, State-Owned Enterprises, and Domestic Business Groups to Economic and Political Transitions: A Network Analysis of the Chilean Telecommunications Sector, 1958- 2005 By Marcelo Bucheli; Erica Salvaj
  2. Interlocked, Business Groups and the State in Chile (1970-2010) By Erica Salvaj; Juan Pablo Couyoumdjian
  3. Central Bank Credibility, Reputation and Inflation Targeting in Historical Perspective By Michael David Bordo; Pierre Siklos
  4. Política industrial: Qué es, por qué es necesaria, y su pasado, presente y futuro en Chile By Goya, Daniel
  5. Sraffa and the Labour Theory of Value - a note By Anderaos de Araujo, Fabio
  6. The Great Depression in Colombia: A Stimulus to Industrialization, 1930-1953 By Juliana Jaramillo-Echeverri; Adolfo Meisel-Roca; María Teresa Ramírez-Giraldo
  7. Literary Ethnography And Nationalism In The Imperial Russia: A Case Of The Naval Ministry“Literary Expedition” By Alexey V. Vdovin
  8. The Great Divergence: A Network Approach By Holger Strulik
  9. Family Types and Intimate-Partner Violence: A Historical Perspective By Ana Tur-Prats
  11. Economic Effects of the Abolition of Serfdom: Evidence from the Russian Empire By Markevich, Andrei; Zhuravskaya, Ekaterina
  12. Debt into Growth: How Sovereign Debt Accelerated the First Industrial Revolution By Jaume Ventura; Hans-Joachim Voth
  13. Newspapers in Times of Low Advertising Revenues By Charles Angelucci; Julia Cage
  14. The Financial Economics of Gold - a survey By O'Connor, Fergal; Lucey, Brian; Batten, Jonathan; Baur, Dirk
  15. Temporary Shocks and Persistent Effects in the Urban System: Evidence from British Cities after the U.S. Civil War By William Hanlon
  16. Is Industrialization Conducive to Long-Run Prosperity? By Franck, Raphaël; Galor, Oded

  1. By: Marcelo Bucheli; Erica Salvaj (School of Business and Economics, Universidad del Desarrollo)
    Abstract: This paper compares the corporate network strategies between multinational corporations of two different origins (United States and Spain), business groups, and state-owned enterprises in the public utility sector of a developing country going through economic and political transitions. The transitions we consider are from an import substitution industrialization model to an open market economy and from a democratic regime to a dictatorial one and back to democracy. We analyze the Chilean telecommunications sector between 1958 and 2005 and find that during a democratic regime all firms sought to build more networks with each other, while incentives decrease under an authoritarian regime. In the protectionist era, US investors built links with Chile’s corporate elite, while in times of an open economy, Spanish investors built these links with the government. State-owned corporations did not attempt to build links with other actors at any time, and business groups sought to build most networks among members of the group. Our findings challenge two commonly held assumptions: first, that open economies decrease incentives for domestic actors to build links with each other and, second, that close political regimes increase incentives to build networks among economic actors.
    Date: 2014–09
  2. By: Erica Salvaj; Juan Pablo Couyoumdjian (School of Business and Economics, Universidad del Desarrollo)
    Abstract: In this paper we examine the relationship among business groups (BGs) in Chile in the long run, focusing on the relations between the state viewed as a BG and privately-owned BGs from 1970 to 2010. Our analysis proceeds within the methodological perspective of interlocking directorates (IDs) analysis. Working with a unique database of the boards of affiliated firms to BGs, we consider IDs as a way to learn about the cohesion and relation between these BGs. We include a period of political change and institutional and economic modernization in Chile, which also involved a transformation in the character of the entrepreneurial class in the country. We find that the state BG has played an important role in the networks of Chilean capitalism. Our work complements the literature on BGs and state capitalism, showing the rich nature of social networks in a capitalist society
    Date: 2015
  3. By: Michael David Bordo; Pierre Siklos
    Date: 2015–06–26
  4. By: Goya, Daniel
    Abstract: For decades, industrial policy was a taboo subject. But this has changed, and nowadays it is recognised that selective State interventions have played a central role in successful development cases. This essay consists of three parts: first I explain what industrial policy is and why it is necessary, discussing the arguments for and against it; part two summarises the history of industrial policies in Chile, especially during the last decade; the third part presents some general guidelines for a future industrial policy. The recently announced productivity agenda mentions industrial policy, but is silent about several of the issues discussed here.
    Keywords: política industrial, diversificación, desarrollo productivo, innovación
    JEL: N96 O25 O38
    Date: 2014–05
  5. By: Anderaos de Araujo, Fabio
    Abstract: An analysis of the invariable measure of prices proposed by the eminent Italian economist Piero Sraffa, who laid the foundations for a new approach in modern economics. Two mathematical appendices are also provided. The first one shows step by step the construction of the Standard Commodity, which is a consistent solution to the transformation of labour values into prices of production. In Appendix II there is a general numerical example of a price system with two industries which makes the understanding of the distribution of income between wages and profits easier. Using a software spreadsheet, for example, it is possible to make numerical simulations and make comparisons between the results obtained from the Sraffa price system with that obtained from Marx's. This is revised version of the original paper written few years ago.
    Keywords: Sraffa, labour theory of value, Standard Commodity
    JEL: A10
    Date: 2015–07–05
  6. By: Juliana Jaramillo-Echeverri; Adolfo Meisel-Roca; María Teresa Ramírez-Giraldo
    Abstract: This paper analyzes the role of the Great Depression and protectionism in the Colombian industrialization of the early 1930s as well as the role of other determinants in the rapid industrialization that took place during the period 1934-1953. We conclude that the market pushed industrialization by reducing costs, generating economies of scale, learning by doing, giving place to agglomeration economies, and rapid technological change. This paper also examines the structure of the Colombian manufacturing sector in 1945, which was the result of the deep socio-economic transformations that took place in the previous decade. The results indicate that the industrialization process was uneven across regions, and that it was spatially concentrated. Estimations of a production function for industry in 1945 show that there were important differences in factor elasticities and productivities among sectors and regions, which led to different regional patterns of industrialization. In addition, the results indicate that labor productivity in 1945 was positively and significantly related to education and capital, whereas it was negatively related to the unskilled workers and the age of the firms.
    Keywords: Industrialization, Great Collapse, market-led industry, Colombia.
    JEL: N1 N66 O14
    Date: 2015–06–30
  7. By: Alexey V. Vdovin (National Research University Higher School of Economics)
    Abstract: This paper explores the ideological sources of the Russian Naval Ministry “literary expedition” in a broad context of ethnographical knowledge, 1840-1860. The author explains which Russian and Western models of literary ethnography compelled Grand Duke Konstantin Nikolaevich to commission Russian writers to describe various provincial regions and ethnic groups. The investigation demonstrates that this expedition was an indispensable part of a broad and influential paradigm of nationalizing knowledge which dominated the Russian science and the literary and discursive fields of the 1850s
    Keywords: literary ethnography, mid-19th century Russian literature, Russian nationalism, writers and power, history of Russian science
    JEL: Z
    Date: 2014
  8. By: Holger Strulik (University of Goettingen)
    Abstract: We present a multi-country theory of economic growth in which countries are connected by a network of mutual knowledge exchange. Knowledge in any country depends on the human capital of the countries it exchanges knowledge with. The diffusion of knowledge throughout the world explains a period of increasing world inequality after the take-off of the forerunners of the industrial revolution, followed by decreasing relative inequality. Knowledge diffusion through a Small World network explains the 'New Kaldor facts' and produces an extraordinary diversity of country growth performances, including the overtaking of individual countries in the course of world development.
    Date: 2015
  9. By: Ana Tur-Prats
    Abstract: This paper examines the historical origins of violence against women, in contrast to earlier literature, which focused only on short-term determinants. It analyses the relation-ship between traditional family patterns (stem versus nuclear) and intimate-partner violence (IPV). Stem families are those in which one child stays in the parental household with spouse and children, so that at least two generations live together. I model the behavior of a traditional peasant family and show how coresidence with a mother-in-law increases a wife’s contribution to farmwork. This increased contribution is shown to potentially decrease the level of violence, since the wife’s reduced productivity acts as a deterrent. In my empirical analysis I use Spanish data, as Spain offers IPV measures of the highest quality as well as a persistent geographical distribution of family types. Results show that areas where stem families were socially predominant in the past currently have a lower IPV rate. I control for a large number of contemporary, historical, and geographical variables. To address causality, I use the stages and differences in the Christian conquest of the Iberian Peninsula (722-1492) as an instrument for the different family types. My instrumental variable results are consistent with my original findings.
    Keywords: gender inequality, cultural norms, persistence, inheritance, coresidence, Christian conquest
    JEL: D03 J12 N43 Z13
    Date: 2015–06
  10. By: David Ricardo Andrade Martínez; Carlos Eduardo Güisa Díaz
    Abstract: Este trabajo es una aproximación al análisis de la estructura del comercio internacional desde un enfoque basado en la teoría de redes. Se estimaron los principales elementos de las redes de comercio internacional para el intervalo de tiempo de 1970 al 2011. Las propiedades extraídas para las redes muestran ser congruentes con la historia geopolítica y económica, y a su vez, dan luces para entender la evolución del comportamiento de los patrones de comercio internacional.
    Keywords: Comercio internacional, Teoría de Redes Sociales, Teoría de Grafos, red social, red de comercio internacional.
    JEL: F00 F01 F02 F15 F31 F47
    Date: 2014–06–24
  11. By: Markevich, Andrei; Zhuravskaya, Ekaterina
    Abstract: We document a very large increase in agricultural productivity, peasants' living standards, and industrial development in the 19th century Imperial Russia as a result of the abolition of serfdom. We construct a novel province-level panel dataset of development outcomes and conduct a difference-in-differences analysis relying on cross-sectional variation in the shares of serfs and over-time variation in emancipation controlling for region-specific trends. We disentangle the effects of the emancipation and the subsequent land reform and show that land reform contributed negatively to agricultural productivity in contrast to a large positive effect of the emancipation. The evidence is consistent with the increase in the power of the peasant commune as the channel of the negative effect of the land reform. The different organizational forms of serfdom were associated with different levels of nutrition of serfs and productivity. The emancipation of serfs from estates where serfs were obliged to work on the landlord's farm (corvee, barshchina) caused an increase in height of their children by 1.6 centimeters. Estates where serfs were required to make in kind payment to the landlord (quitrent, obrok) were equally productive, but, in contrast, their emancipation did not lead to rise in their height. Commitment to an implicit longer-term contract on the amount of serf obligations to landlords, practiced in some estates, made serfdom more productive.
    Keywords: development; forced labor; Russian empire; serfdom
    Date: 2015–02
  12. By: Jaume Ventura; Hans-Joachim Voth
    Abstract: Why did the country that borrowed the most industrialize first? Earlier research has viewed the explosion of debt in 18th century Britain as either detrimental, or as neutral for economic growth. In this paper, we argue instead that Britain’s borrowing boom was beneficial. The massive issuance of liquidly traded bonds allowed the nobility to switch out of low-return investments such as agricultural improvements. This switch lowered factor demand by old sectors and increased profits in new, rising ones such as textiles and iron. Because external financing contributed little to the Industrial Revolution, this boost in profits in new industries accelerated structural change, making Britain more industrial more quickly. The absence of an effective transfer of financial resources from old to new sectors also helps to explain why the Industrial Revolution led to massive social change – because the rich nobility did not lend to or invest in the revolutionizing industries, it failed to capture the high returns to capital in these sectors, leading to relative economic decline.
    Keywords: crowding out, debt crises, Industrial Revolution, Ricardian equivalence, mis-allocation, financial repression, structural change, productivity
    JEL: E22 E25 E62 H56 H60 N13 N23
    Date: 2015–05
  13. By: Charles Angelucci (Columbia Business School); Julia Cage (Département d'économie)
    Abstract: This paper puts the recent evolution of tax revenues in developing countries in historical perspective. Using a novel dataset on total and trade tax revenues we compare the fiscal cost of trade liberalization in developing countries and in today's rich countries at earlier stages of development. We find that trade liberalization episodes led to larger and longer- lived decreases in total tax revenues in developing countries since the 1970s than in rich countries in the 19th and early 20th centuries. The fall in total tax revenues lasts more than ten years in half the developing countries in our sample.
    Keywords: Newspaper; Adversiting Revenues; Price discrimination
    JEL: L11 M13
    Date: 2015–01
  14. By: O'Connor, Fergal; Lucey, Brian; Batten, Jonathan; Baur, Dirk
    Abstract: We review the literature on gold as an investment. We summarize a wide variety of literature. We begin with a review of how the gold markets operate, including the under researched leasing market; we proceed to examine research on physical gold demand and supply, gold mine economics and move onto analyses of gold as an investment. Additional sections provide context on gold market efficiency, the issue of gold market bubbles, gold’s relation to inflation and interest rates, and the very nascent literature on the behavioural aspects of gold.
    Keywords: Gold, survey, review
    JEL: E44 F33 G15 L72 Q31
    Date: 2015–07–08
  15. By: William Hanlon (UCLA)
    Abstract: Urban economies are often heavily reliant on a small number of dominant industries, leaving them vulnerable to negative industry-specific shocks. This paper analyzes the long-run impacts of one such event: the large, temporary, and industry-specific shock to the British cotton textile industry caused by the U.S. Civil War (1861-1865), which dramatically reduced supplies of raw cotton. Because the British cotton textile industry was heavily concentrated in towns in Northwest England, I compare patterns in these cotton towns to other English cities. I find that the shock had a persistent negative effect on the level of city population lasting at least 35 years with no sign of diminishing. Decomposing the effect by industry, I use new data to show that the shock to cotton textiles was rapidly transmitted to local firms in other industries, leading to increased bankruptcies and long-run reductions in employment. This transmission occurred primarily through the link to capital suppliers, such as machinery and metal-goods producers. As a result of these cascading effects, roughly half of the reduction in city-level employment growth in cotton towns during the Civil War was due to the impact on industries other than cotton textiles.
    Date: 2015
  16. By: Franck, Raphaël (Bar-Ilan University); Galor, Oded (Brown University)
    Abstract: This research explores the long-run effect of industrialization on the process of development. In contrast to conventional wisdom that views industrial development as a catalyst for economic growth, the study establishes that while the adoption of industrial technology was conducive to economic development in the short-run, it has had a detrimental effect on standards of living in the long-run. Exploiting exogenous source of regional variation in the adoption of steam engines during the French industrial revolution, the research establishes that regions in which industrialization was more intensive experienced an increase in literacy rates more swiftly and generated higher income per capita in the subsequent decades. Nevertheless, intensive industrialization has had an adverse effect on income per capita, employment and equality by the turn of the 21st century. This adverse effect reflects neither higher unionization and wage rates nor trade protection, but rather underinvestment in human capital and lower employment in skilled-intensive occupations. These findings suggest that the characteristics that permitted the onset of industrialization, rather than the adoption of industrial technology per se, have been the source of prosperity among the currently developed economies that experienced an early industrialization.
    Keywords: economic growth, industrialization, steam engine
    JEL: N33 N34 O14 O33
    Date: 2015–06

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