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on Business, Economic and Financial History |
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Issue of 2017‒09‒24
twenty papers chosen by |
| By: | John R. Graham; Mark T. Leary |
| Abstract: | We put the recent increase in corporate cash in historic perspective by studying nearly 100 years of average and aggregate cash holdings. Corporate cash more than doubled in the first 25 years of our sample before returning to 1920 levels by 1970. Since then, average and aggregate patterns diverge. To understand these patterns, we examine both time-series and cross-sectional variation in cash policies and draw several conclusions. First, the increase in average cash ratios since 1980 is driven entirely by a shift in the cash policies of new entrants, while within-firm changes have been negative or flat since WW II. Second, the cross-sectional relations documented on modern data are remarkably stable back to the 1920s. Third, despite the stability of these relations, firm characteristics explain little of the time series variation in aggregate cash holdings over the century. Macroeconomic conditions, corporate profitability and investment, and (since 2000) repatriation tax incentives help fill this gap. |
| JEL: | E41 G32 H32 N0 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23767&r=his |
| By: | Yann Giraud (Université de Cergy-Pontoise, THEMA) |
| Abstract: | Historians of economics rarely consider textbooks as more than passive receptacles of previously validated knowledge. Therefore, their active role in shaping the discipline and its image is seldom addressed. In this paper, I study the making of Paul Samuelson’s successive editions of Economics from 1967 to 1976 as an instance of how textbooks stand at the crossroads between disciplinary knowledge, pedagogy and larger political and societal concerns. In the mid-1960s, Economics, now at its sixth edition, was at the height of its success. Considered one cornerstone of modern economics, it was also the center of a number of criticisms dealing with the current state of the economic discipline and its teaching in the universities. While the profession expressed its concern over the lack of relevance of economics to address the pressing issues of the day and pleaded for a new “problem-solving” approach to economic education, the late 1960s witnessed the emergence of a new generation of “radical” economists criticizing the economics orthodoxy. Their contention that mainstream theory had neglected the issues of class struggle and capitalist exploitation, found a favorable echo among an increasingly politicized population. Using archival materials, I show how Samuelson, helped by his editorial team at McGraw-Hill, attempted to take into account these changes in order to ensure the continuing success of subsequent editions of his text in an increasingly competitive market. While this study emphasizes Samuelson’s ambiguous attitude toward his contenders, revealing on the one hand his belief in a free marketplace of ideas and, on the other hand, his attachment to mildly liberal politics and aversion to Marxism, unchanged through revisions, it also shows that the textbook is a collective endeavor, embodying different stakeholders’ views and market forces. Therefore, those who are interested in studying textbooks as a way to retrace the development of economic knowledge should not necessarily postulate authorial intent. |
| Keywords: | Paul Samuelson, economics textbooks, economic education, radical economics |
| JEL: | A14 B20 B3 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2017-19&r=his |
| By: | O'Rourke, Kevin Hjortshøj |
| Abstract: | In this paper, I offer some preliminary comparisons between the trade collapses of the Great Depression and Great Recession. The commodity composition of the two trade collapses was quite similar, but the latter collapse was much sharper due to the spread of manufacturing across the globe during the intervening period. The increasing importance of manufacturing also meant that the trade collapse was more geographically balanced in the later episode. Protectionism was much more severe during the 1930s than after 2008, and in the UK case at least helped to skew the direction of trade away from multilateralism and towards Empire. This had dangerous political consequences. |
| Keywords: | Great Depression; great recession; protectionism; Trade collapse |
| JEL: | F13 F14 N70 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12286&r=his |
| By: | Michael D. Bordo |
| Abstract: | The recent rise of populist anti-globalization political movements has led to concerns that the current wave of globalization that goes back to the 1870s may end in turmoil just like the first wave which ended after World War I. It is too soon to tell. The decline and then levelling off of trade and capital flows in recent years reflects the drastic decline in global real income during the Great Recession. Other factors at work include the slowing down in the growth rate of China and the reversal of the extended international supply chains developed in the 1990s, as well as increased financial regulation across the world after the crisis. This suggests either a pause in the pace of integration or more likely a slowing down, rather than a reversal. |
| JEL: | N1 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23786&r=his |
| By: | Armand Hatchuel (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Blanche Segrestin (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Henri Fayol and business manager theory: a new figure of authority at the beginning of the 20th century Before he wrote his famous tract, Henri Fayol was a chief executive officer (CEO), an innovator and a scientist who considered scientific research to be a major responsibility for the head of company. However, as science became the driving force of a new industrial world, it also created an unprecedented connection to the future as it required what was “unknown” to be taken into consideration. This analysis encourages us to re-read Fayol as himself wanted to be read. Far from being universal and common, his administrative doctrine is made up of original ideas and concepts (prévoyance-foresight, inconnu-unknown, programme d’action-program of action, perfectionnement-improvement, constitution du corps social- constitution of the social body) whose theoretical and political impact has been under-estimated. As a result, Fayol was able to imagine a new type of business leader without relying on corporate language nor on the political economy of his time. His outline of a “political/creative” model for a business manager’s action draws from the heritage of the Enlightenment and from political and social philosophy. While this message should have marked a major turning point, Fayol’s originality was subsequently diluted. A century later, it still offers valuable theoretical resources to propose alternatives to a financialized conception of firms |
| Abstract: | Avant d’écrire son célèbre traité, Henri Fayol fut un dirigeant, innovateur et savant, qui considérait la recherche scientifique comme une responsabilité majeure du chef d’entreprise. Or, devenue le moteur du nouveau monde industriel, la science créait aussi un rapport inédit au futur, elle forçait à penser l’inconnu. Ce constat conduit à relire Fayol comme lui-même souhaitait être lu. Loin d’être universelle et banale, sa doctrine administrative apparaît alors composée de notions originales (prévoyance, inconnu, programme d’action, perfectionnement, constitution du corps social) dont la portée théorique et politique a été sous-estimée. Fayol peut ainsi penser un nouveau chef d’entreprise sans recourir ni à la langue des affaires ni à l’économie politique de son temps. C’est dans l’héritage des Lumières et dans la philosophie politique et sociale qu’il puise pour élaborer un modèle « créatif/politique » de l’action du dirigeant d’entreprise qui marque un tournant majeur même si son message a été ensuite banalisé. Un siècle après, retrouver Fayol offre encore une ressource théorique précieuse pour penser des alternatives à la conception financiarisée de l’entreprise |
| Keywords: | entreprise , économie : Fayol,innovation |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01501332&r=his |
| By: | Jean Lacroix |
| Abstract: | Which dimension of economic development spurred support to democracy? This study focuses on industrialization as the dimension triggering the process of “modernization”. It uses a new dataset on Napoleonic plebiscites under the second French Empire (1852-1870). The results in those plebiscites provide a detailed cross-départements (French main administrative units) measure of opposition to autocracy. This study uses the variations in the thriving French modernization to disentangle the effect of industrialization on the vote from the one of other dimensions of economic development. The results show that a ten-percent increase in industrialization reduced the share of “Yes” ballots by 0.4 to 0.7 percentage points in the 1870 plebiscite. An IV strategy using distance to the first city having adopted steam engines, access to coal and waterpower as instruments confirms causality. The baseline results are robust to controlling for other explanations of the vote and to using alternative specifications and estimation methods. |
| Keywords: | Industrialization; Modernization; Democratic consolidation |
| JEL: | N43 O14 |
| Date: | 2017–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/258048&r=his |
| By: | Matthew Jaremski; Gabriel Mathy |
| Abstract: | Outside of the recent past, excess reserves have only concerned policymakers in one other period: the Great Depression. The data show that excess reserves in the 1930s were never actively unwound through a reduction in the monetary base. Nominal economic growth swelled required reserves while an exogenous reduction in monetary gold inflows due to war embargoes in Europe allowed excess reserves to naturally decline towards zero. Excess reserves fell rapidly in early 1941 and would have unwound fully even without the entry of the United States into World War II. As such, policy tightening was at no point necessary and could have contributed to the 1937-1938 Recession. |
| JEL: | E32 E58 N12 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23788&r=his |
| By: | Michael Batu (Department of Economics, University of Windsor) |
| Abstract: | This paper offers new evidence on the causal link between poverty and elite capture within a democratic country. The extent of elite capture was derived from the names of 64,152 elected officials in four election cycles at the provincial and municipal levels in the Philippines. To identify the causal relationship between elite capture and poverty, this study exploits the exogenous variation in the number of churches constructed in the Philippines during the Spanish colonization period (1521-1898). These structures were built in locations where political families developed and persisted to the present. Using the number of colonial churches as an instrument in a two-stage least-squares regression, this study finds that poverty in Philippine provinces is inversely proportional to the percentage of positions controlled by elites and directly proportional to decreased competition among elites. Results are robust to the measure of poverty used as well as controlling for other plausible channels through which the presence of colonial churches may influence poverty in the Philippine provinces. |
| Keywords: | Political elites; elite capture; poverty; institutions |
| JEL: | D72 F54 I32 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:wis:wpaper:1708&r=his |
| By: | Tom Vogl (Princeton University, BREAD, and NBER) |
| Abstract: | Fertility change is distinct from other forms of social and economic change because it directly alters the size and composition of the next generation. This paper studies how changes in population composition over the fertility transition feed back into the evolution of average fertility across generations. Theory predicts that changes in the relationship between human capital and fertility first weaken and then strengthen fertility similarities between mothers and daughters, a process that first promotes and then restricts aggregate fertility decline. Consistent with these predictions, microdata from 40 developing countries over the second half of the 20th century show that intergenerational fertility associations strengthen late in the fertility transition, due to the alignment of the education-fertility relationship across generations. As fertility approaches the replacement level, the strengthening of these associations reweights the population to raise aggregate fertility rates, pushing back against aggregate fertility decline. |
| JEL: | J10 O10 O40 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cheawb:2017-01&r=his |
| By: | Ross Levine; Chen Lin; Wensi Xie |
| Abstract: | We assess how the African slave trade—which had enduring effects on social cohesion—continues to influence financial systems. After showing that the intensity with which people were enslaved and exported from Africa during the 1400 – 1900 period helps account for overall financial development, household access to credit, and firm access to finance, we evaluate three potential mechanisms linking the slave trade to modern finance—information sharing institutions, trust in financial institutions, and the quality of legal institutions. We discover that the slave trade is strongly, negatively related to the information sharing and trust mechanisms but not to the legal mechanism. |
| JEL: | G21 N27 O16 O55 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23800&r=his |
| By: | Pakhomova, L. |
| Abstract: | These days an ability of a company to achieve operational excellence in multiple priorities is considered by researchers and practitioners as a source of company’s competitive advantage. However, the current state of knowledge does not have a consensus on how competitive priorities emphasis can be achieved. This paper is devoted to the literature review analysis on the topic of competitive priorities and their role in operations strategy and business performance. The analysis was based on the articles published in top-tier journals in Operations and Technology Management field during 1969-2015. On the basis of this analysis, the current state of competitive priorities concept in Operations and Technology Management has been described and suggestions for future research have been developed. |
| Keywords: | competitive priorities, operations strategy, literature review, innovation, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:sps:wpaper:6448&r=his |
| By: | Nayoung Rim (United States Naval Academy) |
| Abstract: | During the 1960s, there were essentially three career choices for women: nurse, secretary, or teacher. Graduate school admissions quotas largely prevented women from pursuing different career paths. Title IX of the Education Amendments of 1972 removed this barrier by making gender discrimination in admissions illegal. This paper examines whether this policy was successful in reducing gender disparity in graduate education. I find a sharp and dramatic convergence of female versus male graduate degree fields coincident with the passage of Title IX. This distributional change occurred as females predominantly moved into male-dominated fields and does not seem to be driven by gender-specific preferences. Further, alternative explanations, including birth control pill access and abortion legalization, were gradual changes and cannot explain the large, national shift in graduate-field distribution that occurred immediately following Title IX. In addition to providing evidence of successful anti-discrimination legislation, this paper sheds new light on the factors responsible for the college gender gap reversal. |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:usn:usnawp:58&r=his |
| By: | Casper Worm Hansen (Department of Economics, University of Copenhagen); Peter Sandholt Jensen (University of Southern Denmark); Peter Egedesø Madsen (University of Southern Denmark) |
| Abstract: | Tuberculosis (TB) is a leading cause of death worldwide and, while treatable by antibiotics since the 1940s, drug resistant strains have emerged. This paper estimates the effects of the establishment of a pre-antibiotic era public health institution, known as a TB dispensary, designed to prevent the spread of the disease. Our annual difference-in-differences estimation reveals that the rollout of the dispensaries across Danish cities led to a 19 percent decline in the TB mortality rate, but exhibits no significant impacts on other diseases in placebo regressions. We next take advantage of the dispensaries' explicit targeting on TB to set up a triple-differences model which exploits other diseases as controls and obtain a similar magnitude of the effect. Using monthly mortality data in a similar strategy leads to the same conclusion. In addition, we find small positive spillover effects of the dispensaries on productivity as measured by annual income per taxpayer at the city level, digitized from historical tax-assessment records. Overall, the evidence highlights the provision of personalized information on infectious diseases as a cost-effective cause of the historical mortality decline. |
| Keywords: | Tuberculosis, mortality, disease prevention, information, rollout, productivity |
| JEL: | D62 H23 I15 I18 N34 |
| Date: | 2017–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:1719&r=his |
| By: | Gregory Clark, Andrew Leigh, Mike Pottenger |
| Abstract: | The paper estimates long run social mobility in Australia 1870-2017 tracking the status of rare surnames. The status information includes occupations from electoral rolls 1903-1980, and records of degrees awarded by Melbourne and Sydney universities 1852-2017. Status persistence was strong throughout, with an intergenerational correlation of 0.7-0.8, and no change over time. Notwithstanding egalitarian norms, high immigration and a well-targeted social safety net, Australian long-run social mobility rates are low. Despite evidence on conventional measures that Australia has higher rates of social mobility than the UK or USA (Mendolia and Siminski, 2016), status persistence for surnames is as high as that in England or the USA. Mobility rates are also just as low if we look just at mobility within descendants of UK immigrants, so ethnic effects explain none of the immobility. |
| Keywords: | intergenerational mobility; social mobility; inequality |
| JEL: | J62 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:auu:hpaper:058&r=his |
| By: | J.R. Clark (The University of Tennessee at Chattanooga); Joshua C. Hall (West Virginia University, Department of Economics); Ashley S. Harrison (The University of Tennessee at Chattanooga) |
| Abstract: | The CEE had been allocated one session in the AER Papers and Proceedings (P&P) since 1964. In 2008, the American Economic Association evaluated the allocation of AER Papers and Proceedings sessions to various AEA Committees. In response, the CEE was asked to prepare a one-page rationale for keeping that session. Their response (Committee on Economic Education, 2008) made several important defenses of the session, including that the quality of the papers published in these sessions must speak for itself. In this paper, we propose to evaluate the relative quality of AER P&P papers through citation analysis. Using the Social Science Citation Index, the citation counts of CEE AER P&P papers are compared to other papers included in the issue. |
| Keywords: | economic education, citation analysis |
| JEL: | A10 A20 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:17-23&r=his |
| By: | Jean-Christophe Gessler (Centre de Recherche Magellan - Université Jean Moulin - Lyon III - Institut d'Administration des Entreprises (IAE) - Lyon) |
| Abstract: | 40 articles sont analysés dans une revue de littérature pour étudier la manière dont les pratiques collaboratives des PME sont abordées dans la littérature scientifique en International Business et les observations dégagées par ces travaux. Une approche théorique présente ces pratiques et les confronte aux principaux modèles d'internationalisation ; une étude des articles retenus est ensuite conduite par une analyse multicritères. Elle montre qu'au-delà du consensus sur les effets bénéfiques de la collaboration la littérature est marquée par une grande hétérogénéité de définitions, d'approches et de conclusions. A l'issue de cette analyse des propositions de recherches sont formulées. |
| Keywords: | Collaboration, réseau, internationalisation, PME |
| Date: | 2016–06–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01393156&r=his |
| By: | Joseph E. Stiglitz |
| Abstract: | This paper provides a critique of the DSGE models that have come to dominate macroeconomics during the past quarter-century. It argues that at the heart of the failure were the wrong microfoundations, which failed to incorporate key aspects of economic behaviour, e.g. incorporating insights from information economics and behavioural economics. Inadequate modelling of the financial sector meant they were ill-suited for predicting or responding to a financial crisis; and a reliance on representative agent models meant they were ill-suited for analysing either the role of distribution in fluctuations and crises or the consequences of fluctuations on inequality. The paper proposes alternative benchmark models that may be more useful both in understanding deep downturns and responding to them. |
| JEL: | A1 A2 E0 E1 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23795&r=his |
| By: | François De March (IRG - Institut de Recherche en Gestion - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12) |
| Abstract: | Depuis quelques années, le recours aux récits et narrations fait l’objet de plusieurs travaux en sciences de gestion essentiellement anglo-saxons mais aussi français (par exemple Czarniawska, 2000, 2005 ; De Cock, 2000 ; Giroux, Marroquin, 2005 ; Lumineau, Landais, 2005 ; Jorgensen, Strand and Borge, 2013). L’écrivain Georges Bataille a au cours du XXe siècle produit de nombreux récits, romans et ouvrages théoriques dont les thèmes cotoyaient certains de ceux évoqués aujourd’hui dans les sciences des organisations. Il a été l’inspirateur de plusieurs philosophes de la « french theory » (Michel Foucault, Jacques Derrida, Jean-François Lyotard, Jean Baudrillard, le psychanalyste Jacques Lacan) qui sont eux-mêmes des références pour tout le courant critique en management appelé « critical management studies ». L’un des apports majeurs de l’oeuvre de Bataille a été sa critique du langage scientifique et philosophique et plus généralement de l’ensemble du langage discursif, y compris narratif, dans sa prétention à vouloir représenter, argumenter et donner du sens à une réalité située en dehors de lui. L’objet de cette communication est de se demander si cette critique ne pourrait pas ouvrir la voie à une épistémologie différente et innovante pour certaines recherches en gestion. |
| Keywords: | Georges Bataille 1897-1962,Langage en gestion,Epistémologie en gestion |
| Date: | 2017–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01587648&r=his |
| By: | Pantic, B. |
| Abstract: | Financial statement comparability has for a long time been one of the main points of interest of financial accounting research. Recent studies and particularly those that followed De Franco et al.’s (2011) influential paper were mostly focused on putting to use the results of the financial reporting process to measure the level of accounting comparability and thus the comparability of financial results between companies. This working paper makes a short survey of recent studies that measure comparability of financial statements. As such it describes and comments on four important studies that introduced measuring concept for this problem. Second part of the research deals with classification of recent different streams of literature in this field. In conclusion, It also sums up what has already been achieved in comparability research. |
| Keywords: | financial statements, comparability, IFRS, literature review, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:sps:wpaper:6451&r=his |
| By: | Vasilios Plakandaras (Department of Economics, Democritus University of Thrace, Greece); Rangan Gupta (University of Pretoria, Pretoria, South Africa); Constantinos Katrakilidis (Department of Economics, Aristotle University of Thessaloniki, Greece); Mark E. Wohar (College of Business Administration, University of Nebraska at Omaha, Omaha, USA and School of Business and Economics, Loughborough University, Leicestershire, UK) |
| Abstract: | In this paper, we study the effect of macroeconomic shocks in the determination of house prices. Focusing on the U.S. and the U.K. housing market, we employ time-varying Vector Autoregression models using Bayesian methods covering the periods of 1830-2016 and 1845-2016 respectively. We consider real house prices, output growth, short-term interest rates and inflation as input variables in order to unveil the effect of macroeconomic shocks on house prices. From the examination of the impulse responses of house prices on macroeconomic shocks, we find that technology shocks dominate in the U.S. real estate market, while their effect is unimportant in the U.K. In contrast, monetary policy drives most of the evolution of the U.K. house prices, while transitory house supply shocks are unimportant in either country. These findings are further corroborated with the analysis of conditional volatilities and correlations to macroeconomic shocks. Overall, we are able to better understand the dynamic linkages in the relationship of the macro economy and house prices. Over time, we analyze the variations in economic events happening at the imposition of the shock and uncover characteristics missed in the time-invariant approaches of previous studies. |
| Keywords: | time-varying VAR, house prices, macroeconomic shocks |
| JEL: | C32 R30 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201765&r=his |