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on Business, Economic and Financial History |
| By: | Foreman-Peck, James; Hannah, Leslie |
| Abstract: | We explore which business forms were predominant in the later Victorian economy and why some forms were more effective among large British manufacturing firms during this period. With a dataset of 483 manufacturing firms in 1881 that either employed at least 1000 or had done so a decade earlier, we find that the great majority were partnerships. Public corporations attained higher capital–labour ratios and stronger employment growth than other business forms. The separation of ownership from control was most effective where it was most thoroughly practised, as by public, in contrast to private, corporations. Engineers were frequently encountered in all business forms and associated with expanding employment. But the large public manufacturing corporations employed almost twice the proportion of engineers and professionals in top management as other enterprises. Family firms, proxied by heirs, were present in management of three-quarters of partnerships but in only one-third of public corporations. Heirs reduced the employment growth of the firm, whereas engineers boosted it. Lords, mayors, and landed wealth in management were also associated with faster employment growth of enterprises. |
| Keywords: | business performance; corporations; engineers; manufacturing; partnerships; Victorian economy |
| JEL: | J1 |
| Date: | 2024–11–03 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126037 |
| By: | Adriana Kugler |
| Date: | 2024–11–14 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgsq:99068 |
| By: | Guo, Jingyuan; Deng, Kent |
| Abstract: | This paper explores how changes in state capacity facilitates economic growth in an authoritarian system. This is the case of Deng Xiaoping’s systematic replacement of government officials with a new army of better-educated technocrats which uprooted Maoist revolutionary cadres. Our assumption is that post-Mao economic growth can be taken as a proxy for state capacity improvement. With a continuous treatment difference-in-differences strategy, this paper reveals that one percent increase in officials’ replacement intensity results in 1.3 percent increase in GDP in post-Mao China. Moreover, effects are robust across various technical concerns and maintain stable over a period of four decades. Furthermore, our results explain 18.05 percent of the contemporary economic disparity between China’s provinces (with intensity above and below the median). These effects can be associated with improvements in officials’ human capital which in turn rebuilt China’s fiscal capability, re-started a market-friendly industrialization, and resumed grassroots self-governing institutions. All these have been achieved without a regime change in the People’s Republic of China, hence, a ‘bloodless coup d’état’. |
| Keywords: | officials' replacement; state capacity; economic reforms; economic growth |
| JEL: | H11 O11 N45 |
| Date: | 2024–11–14 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:wpaper:126083 |
| By: | Philipp Ager; Casper W. Hansen; Peter Z. Lin |
| Abstract: | We study the impact of the first effective medical treatment for an infectious disease—diphtheria antitoxin—on the historical health transition in the United States. Using an instrumental variable for local antitoxin adoption rates and information from approximately 1.6 million death certificates from 1880 to 1914, we find that the rapid diffusion of antitoxin led to a substantial decline in diphtheria mortality rates and increased life expectancy at birth. Exposure to antitoxin also significantly reduced school absenteeism. Overall, our results suggest that medicine played a more important role in increasing life expectancy in the early 20th century than previously thought. |
| Keywords: | Life expectancy; medical technology; antitoxin |
| JEL: | J11 N32 I15 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_607 |
| By: | Natalya Naumenko (George Mason University) |
| Abstract: | Using recently discovered archival data, this article studies the changes in the Soviet population and the urbanization patterns after the 1933 famine. It documents that, although most of the direct victims lived in the rural areas, the famine is associated with a persistent negative change in the urban population. In fact, the rural population gradually recovered while urban settlements in more affected areas became permanently smaller. The paper shows that these changes were not planned in the First Five-Year Plan (1928--1933), but that subsequent plans may have incorporated and exacerbated the differences in urbanization that occurred during the years of rural crisis. The paper argues that the shortage of labor during the crucial years of the rapid industrialization hindered the development of cities in areas stricken by the famine. Thus, the timing of the shock to population appears to be important. While established urban networks tend to recover from large temporary negative shocks, the lack of people during construction and rapid growth might have a permanent negative impact. |
| Keywords: | Russia, Famine consequences, Multiple equilibria |
| JEL: | N34 O18 P25 R12 R13 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:hes:wpaper:0270 |
| By: | Obregon, Carlos |
| Abstract: | In social sciences there has been a long debate between the defenders of institutionalism and those of liberalism. The debate has centered around the relationship that exists between the individual (agent) and the social institutions (social structure). In general, liberalism defends that the individual ́s (agent ́s) preferences, choices, and behavior define the social institutions (social structure); while institutionalism argues that the social institutions define the individual ́s preferences, choices, and behavior. Some authors have attempted to solve the debate by proposing a dual feedback loop between the individual and the social institution, in which both mutually define each other. But the solution is not as simple as that. In this book, it is argued that liberalism is fully compatible with institutionalism, although only by following a pragmatic-scientific conception of both. It is ascertained that liberalism is an institution, that was born in a particular historical period of the Western societies. Therefore, since liberalism itself is an institution, it follows that liberalism is compatible with institutionalism. It is argued in here that although it is in general true that institutionalism defends that individual preferences, choices, and behaviors are defined by social institutions; once the society grants the individuals political and economic freedom, these individual preferences, choices, and behaviors become critical in defining the dynamics of the institutional arrangement in question – as liberalism has pointed out. |
| Keywords: | institutionalism, liberalism, individual, social institutions, social structure, preferences, choices, behavior, Western societies, society, political, politics, economic |
| JEL: | A10 A12 A13 A14 B00 B30 B31 G00 G01 G02 G20 G28 G29 H00 N00 P00 P20 P25 P26 P40 R00 |
| Date: | 2023–03–03 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122455 |
| By: | Alvaredo, Facundo (Paris School of Economics); Berman, Yonatan (King's College London); Morelli, Salvatore (Roma Tre University) |
| Abstract: | This paper studies the estimation of wealth distribution using estates left at death. We establish formal conditions for adopting a simplied version of the classic estate multi- plier method, using only minimal information on estates and mortality. We empirically validate these conditions and apply the simplied approach to produce novel long-run top wealth share series for Belgium, Japan, and South Africa, where estate data have not yet been exploited. This approach may vastly expand the range of countries and years for which wealth inequality can be estimated, where estate data exist but the standard method cannot be applied. |
| Keywords: | public economics, wealth inequality, estate tax, mortality rates |
| JEL: | D3 H2 N3 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17389 |
| By: | Kronauer, Martin |
| Abstract: | The paper directs attention to the rise of the extreme Right in the context of political and social changes within European societies during the last forty years. This brings the legacy of neoliberalism into focus. The author holds that neoliberalism and the rise of the extreme Right are linked in two ways: neoliberalism in itself is an antidemocratic and socially destructive political project, and by undermining social foundations of citizenship, it paved the way for the extreme Right. The latter exploits social fears rooted in societies that ever more drift apart. |
| Keywords: | Neoliberalism, policy, inequality, citizenship, extreme Right |
| JEL: | E65 F66 F68 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ipewps:305269 |
| By: | Heng-fu Zou (The World Bank) |
| Date: | 2024–11–13 |
| URL: | https://d.repec.org/n?u=RePEc:cuf:wpaper:700 |
| By: | Gabriel, Salome |
| Abstract: | The research focuses on the impact of selected world religions on economic life, specifically examining beliefs, concepts, and attitudes toward work ethic, temperance, and honesty. While recognizing that different motivations may be at play, the study argues that no single religion yields greater economic development benefits than others. Additionally, historical experience suggests that world religions, by their longevity, may contribute to economic outcomes, such as charitable practices, which can be linked to economic success. For instance, the Protestant work ethic emphasizes frugality, hard work, and wealth accumulation, which contrasts with universal charity. Building on Tawney's insights, this study examines the paradox within religious values — a paradox that Wesley addressed in his success with his Methodist parishioners, who earned middle-class respectability. The paper explores how individuals struggle to reconcile their behavior with salvation benefits, investigating how religious beliefs influence communal actions and economic behavior. Moreover, the study aims to bridge theoretical explanation and practical application by examining the association between religious motivations—rooted in salvific merit or demerit—and pragmatic outcomes. Ultimately, the research seeks to deepen understanding of how salvific theology shapes economic behavior across faith traditions and provides a unique perspective on the socio-economic effects of faith-based motivations. |
| Keywords: | Salvation, religion, economic, work |
| JEL: | Z12 Z13 |
| Date: | 2024–10–15 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122583 |
| By: | Robert J R Elliott (University of Birmingham); Fabio Gatti (University of Bern); Eric Strobl (University of Bern & University of Birmingham) |
| Abstract: | This paper quantifies the impact of the 1630-1631 Italian plague on the business activities of the Florentine merchant-bank Saminiati & Guasconi. Employing AI for handwriting recognition on over 6, 000 bank letters we show that letters and goods transactions decreased by two-thirds when a merchant lived in an infected town although this negative effect was halved when the correspondent also resided in an infected town. Mentions of precious coins however increased reflecting a flight to the safety of hard currency. The plague also shifted the bank’s merchant network towards Southern and Eastern Europe and away from the Atlantic Coast. |
| Keywords: | merchants, plague, trade |
| JEL: | N00 N73 N83 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:hes:wpaper:0271 |
| By: | Haddad, Joanne; Kattan, Lamis |
| Abstract: | By the end of the nineteenth century, labor legislation for women had become a prominent issue in the United States, with most states enacting at least one female-specific work regulation. We examine the impact of three previously unexplored legislation: seating, health and safety, and night-work regulations. Given that not all states adopted these laws, and the staggered nature of adoption, we rely on a difference-in-differences strategy design to estimate the effects on female gainful employment. Our findings indicate that laws regulating health and safety conditions and restricting women's night work increased the likelihood of female employment by about 4% to 8%, accounting for about 10% to 20% from the total increase during our period of analysis. Examining heterogeneous effects reveals that younger and married women without children witnessed the largest increase in the likelihood of employment. We also document that native, higher-class and literate women were also incentivized to join the workforce. Women's labor supply in the decades under consideration has been estimated to be quite inelastic with respect to own wage. Nevertheless, we find sizable labor force participation responses to the female-specific labor regulation we study. This indicates that the legislation must have shifted women's labor supply curves, either because it made jobs more pleasant, or because it improved perceptions about how respectable it is for a woman to work in the labor market. Both channels would reduce disutility from work, and increase labor supply at any given wage level. Our findings hold important implications for policymakers and advocates seeking to promote gender equality in the labor market. |
| Keywords: | Labor Supply, Labor Law, Gender Law, Gender Norms |
| JEL: | J08 J16 J21 J24 J78 K31 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1518 |
| By: | Christoph Gortz; Christopher Gunn; Thomas A. Lubik |
| Abstract: | We document changes to the pattern of technology shocks and their propagation in post-war U.S. data. Using an agnostic identification procedure, we show that the dominant shock driving total factor productivity (TFP) is akin to a diffusion or news shock and that shock transmission has changed over time. Specifically, the behavior of hours worked is notably different before and after the 1980s. In addition, the importance of technology shocks as a major driver of aggregate fluctuations has increased over time. They play a dominant role in the second subsample, but much less so in the first. We build a rich structural model to explain these new facts. Using impulse-response matching, we find that a change in the stance of monetary policy and the nature of intangible capital accumulation both played dominant roles in accounting for the differences in TFP shock propagation. |
| Keywords: | Technology Shocks; TFP; business cycles; shocks transmission |
| JEL: | E20 E30 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedrwp:99119 |
| By: | Ruben Enikolopov; Maria Petrova; Gianluca Russo; David Yanagizawa-Drott |
| Abstract: | We examine the long-run effect of homophily in online social networks on interpersonal interactions in local communities. We measure online homophily across counties in the US using Facebook data. For identification, we exploit a conflict between Facebook and Google over data sharing of user information during the early expansion phase of Facebook. We find evidence that homophilic connections led to increased social media usage but reduced offline socialization. This shift was accompanied by deterioration of local social cohesion, as individuals became less connected across income strata and less likely to share the same political opinions with others in their counties. |
| Keywords: | social media, networks, homophily, social capital |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11375 |
| By: | Mirko Djukic (National Bank of Serbia) |
| Abstract: | The frequency of certain topics in newspaper articles can be a good indicator of some economic developments. The application of topic modelling in the Serbian language, using the LDA model, is hampered by the fact that Serbian is a highly inflectional language, where words have a large number of forms which the model recognises as words with a different meaning. In this paper, we tried to turn that aggravating circumstance into an advantage by reducing only the economic words to their base form. Thus, we attributed to them a greater relevance than to non-economic words, which remained in a large number of forms with a lower frequency of occurrence. As the topics classified in this manner were mostly based on economic expressions, it was expected that they would have a greater applicability in further economic analyses. |
| Keywords: | textual analysis, topic modelling, Latent Dirichlet Allocation, LASSO model |
| JEL: | C13 C55 E31 E37 E52 |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:nsb:bilten:21 |
| By: | Neurath, Christopher |
| Abstract: | BACKGROUND: Extensive academic research has documented the tobacco industry's manipulation of science. Recently, scholars have begun examining the sugar industry’s use of similar tactics to downplay sugar’s role in obesity, diabetes, cardiovascular disease, and tooth decay. Archival records show sugar-industry-funded scientists criticized evidence linking sugar to these harms and deflected attention to other risk factors. Sugar’s connection to tooth decay has been the most difficult harm for the industry to deny. Evidence is emerging that the industry turned to promoting fluoride as the solution to tooth decay thereby averting calls for reducing sugar consumption. Newly accessible sugar and dental industry documents enable investigation into whether fluoride research was manipulated to deflect from sugar’s role in tooth decay, and later to defend fluoride when evidence of fluoride’s own harmful effects arose. METHOD: Internal documents from sugar and dental organizations were examined and compared to the published scientific record. The Industries Documents collection at the University of California San Francisco was the main source of records. Analysis was in the context of the current understanding of how vested interests manipulate science to defend their products. RESULTS: Records dating back to the 1930s demonstrate the sugar industry, sometimes in cooperation with dental interests, exaggerated fluoride’s effectiveness and downplayed safety concerns. The sugar industry’s science manipulation campaign preceded the better-known tobacco industry campaign defending cigarettes. Key leaders of the sugar industry’s campaign transferred to the tobacco industry, which then adopted many of the sugar industry’s tactics and financed research from some of the same sugar-conflicted scientists. Currently, a prominent safety issue with fluoride is developmental neurotoxicity. Evidence indicates that researchers with undisclosed conflicts of interest with sugar and allied industries produced biased reviews downplaying this risk. CONCLUSION: Recently available records reveal a long history of the sugar industry distorting fluoride science. Many of the sugar industry's tactics were later adopted by the tobacco industry and mirrored by industries involved in asbestos, lead, pesticides, climate change denial, and others. Researchers and policymakers should be aware of the distorted scientific record regarding fluoride effectiveness and toxicity. |
| Date: | 2024–11–08 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:yskz9 |
| By: | Mills, Stuart; Whittle, Richard |
| Abstract: | The UK Behavioural Insights Team transformed nudging and behavioural economics from nascent ideas to key policy tools for the UK Coalition Government. This article argues that political economic circumstances significantly contributed to the success of this ‘nudge’ programme. The Global Financial Crisis (GFC) created a ‘contest of authority’ over dominant policy approaches. By framing the crisis as a crisis of rationality, behavioural perspectives gained political support. The GFC also saw that the UK Government (from 2010) adopt a programme of fiscal austerity. Nudging complemented this programme by suggesting effective policy could be made cheaply. Using various accounts of nudging in the UK from those involved in its development, we demonstrate the role of the country’s political economy in the behavioural turn. We conclude by reflecting on the role of behavioural insights today, given a political–economic landscape much changed since 2010. |
| Keywords: | austerity; behavioural economics; nudge; political economy |
| JEL: | D90 |
| Date: | 2024–10–25 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126042 |
| By: | Yoo, Yiseon (Korea Institute for Industrial Economics and Trade); Hong, Jang Jae (Regional Policy Research Institute) |
| Abstract: | In this article, we propose a definition for “regional balanced development, ” drawing from works in the literature and an analysis of its elemental terms. We briefly review the history of regional balanced development (RBD) in Korea and explore the directions future policy may take. |
| Keywords: | balanced development; regional development; regional inequality; demographic change; demographics; population aging; local extinction; Korea; KIET |
| JEL: | R10 R11 R12 |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kieter:2024_023 |
| By: | Charles Yuji Horioka |
| Abstract: | The primary objective of this paper is to explore the determinants of the level of, and trends over time in, Japan’s household saving rate, with emphasis on the impact of the age structure of the population, and to make projections about future trends therein. The paper finds that Japan’s household saving rate has not always been high either absolutely or relative to other countries, contrary to popular belief, and that, if we confine ourselves to the postwar period, it was only during the 25-year period from 1961 to 1986 that it exceeded 15%. Past and future trends in Japan’s household saving rate can largely be explained by changes in the age structure of her population, but declines in the saving rate of retired elderly households is a more important explanation for the recent decline in the household saving rate. However, it is likely that other factors such as the unavailability of consumer credit, the unavailability of social safety nets, high rates of economic (income) growth, tax breaks for saving, saving promotion policies, and high and rising land and housing prices are also partial explanations for why Japan’s aggregate household saving rate was so high during the 1961-86 period and why it declined so much subsequently. As for future trends in Japan’s aggregate household saving rate, it is likely to fall even further though not necessarily at a rapid rate. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:dpr:wpaper:1264 |
| By: | Buchak, Greg (Stanford U); Matvos, Gregor (Northwestern U); Piskorski, Tomasz (Columbia U); Seru, Amit (Stanford U) |
| Abstract: | The traditional model of bank-led financial intermediation, where banks issue demandable deposits to savers and make informationally sensitive loans to borrowers, has seen a dramatic decline since 1970s. Instead, private credit is increasingly intermediated through arms-length transactions, such as securitization. This paper documents these trends, explores their causes, and discusses their implications for the financial system and regulation. We document that the balance sheet share of overall private lending has declined from 60% in 1970 to 35% in 2023, while the deposit share of savings has declined from 22% to 13%. Additionally, the share of loans as a percentage of bank assets has fallen from 70%to 55%. We develop a structural model to explore whether technological improvements in securitization, shifts in saver preferences away from deposits, and changes in implicit subsidies and costs of bank activities can explain these shifts. Declines in securitization cost account for changes in aggregate lending quantities. Savers, rather than borrowers, are the main drivers of bank balance sheet size. Implicit banks’ costs and subsidies explain shifting bank balance sheet composition. Together, these forces explain the fall in the overall share of informationally sensitive bank lending in credit intermediation. We conclude by examining how these shifts impact the financial sector’s sensitivity to macroprudential regulation. While raising capital requirements or liquidity requirements decreases lending in both early (1960s) and recent (2020s) scenarios, the effect is less pronounced in the later period due to the reduced role of bank balance sheets in credit intermediation. The substitution of bank balance sheet loans with debt securities in response to these policies explains why we observe only a fairly modest decline in aggregate lending despite a large contraction of bank balance sheet lending. Overall, we find that the intermediation sector has undergone significant transformation, with implications for macroprudential policy and financial regulation. |
| JEL: | E50 G20 G21 G22 G23 G24 G28 |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:ecl:stabus:4181 |