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on Business, Economic and Financial History |
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Issue of 2016‒01‒29
twenty papers chosen by |
| By: | Grietjie Verhoef |
| Abstract: | Multinational corporations have commenced foreign direct investment (FDI) activities since the 1960s by moving operations to resource-rich, low-cost labour and capital markets (Wilkins, 1970; 1974; 1988; Jones, 1994; 2005). The first wave of outward foreign direct investment (OFDI) during the 1960s and 1970s was motivated by efficiency and market-seeking factors. This wave was dominated by firms from Asia and Latin America. A second wave of OFDI followed in the 1980s, led by strategic asset-seeking enterprises from Hong Kong, Taiwan, Singapore and South Korea (Dunning et al., 1996; UNCTAD, 2005b: 3s). Since the 1990s China, Brazil, India, Russia (the so-called BRIC countries) Malaysia, Turkey and South Africa are among the countries expected to add significantly to OFDI growth (UNCTAD, 2005c: 4). The emergence of EMTNCs (Emerging Market Transnational Corporations) makes up a growing proportion of outward FDI and they acquire an increasing share in foreign affiliates from developed markets conducting business in their regions. This paper reflects on the transformation of businesses and business practice in Africa, from isolated peripheral actors to global players. A growing number of African multinational corporations extended business operations from behind marginalized peripheral operations to global markets. This paper investigates the history of leading emerging market multinational corporations from Africa since the 1980s. |
| Keywords: | Globalization, strategy, market seeking, state, change management |
| JEL: | N17 O55 M16 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:570&r=his |
| By: | Anna Orthofer |
| Abstract: | The point of departure of Thomas Piketty’s influential Capital in the Twenty-First Century was the dramatic growth of private wealth-income ratios in the advanced economies between 1970 and 2010. Using official balance sheet data for South Africa—the first country to publish such data in the developing world—, this paper examines to what extent this reemergence of private wealth was also experienced in the developing-country context. First, we find that the South African current wealth-income ratio is very close to its level in 1975 (255 and 240 percent), and thus much lower than those of Piketty’s sample of advanced economies (where they increased from 200-300 to 400-700 percent). Second, we show that the discrepancy is explained not only by South Africa’s relatively low savings rates, but also by the reduction of wealth before and during the transition to democracy in the 1990s. Since the late 1990s, however, private wealth recovered significantly, indicating that South Africa might resemble the advanced economies more closely in the future. |
| Keywords: | saving, Wealth |
| JEL: | E01 E10 E21 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:564&r=his |
| By: | Daisuke Ikeda (Director and Senior Economist, Institute for Monetary and Economic Studies, Bank of Japan (currently Financial System and Bank Examination Department, E-mail: daisuke.ikeda@boj.or.jp)); Yasuko Morita (Director and Senior Economist, Institute for Monetary and Economic Studies, Bank of Japan@(E-mail: yasuko.morita@boj.or.jp)) |
| Abstract: | Following the start of modern economic growth around the mid- 1880s, Japanfs economy continued to substantially lag behind leading economies before World War II, but achieved rapid catch-up after the war. To explain the patterns, we build a dynamic model and examine the role of barriers to technology adoption. We find such barriers hampered catch-up in the prewar period and explain about 40 percent of the postwar miracle. Taking a historical perspective, we argue that factors that acted as barriers include low capacity to absorb technology, economic and political frictions with the outside world, and a lack of competition. |
| Keywords: | Japan, Barriers to technology adoption, Investment specific technology, Catch-up, Postwar miracle |
| JEL: | N15 N75 O11 O41 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:ime:imedps:16-e-01&r=his |
| By: | Alejandra Irigoin |
| Abstract: | The essay examines Spain’s colonial legacy in the long run development of Spanish America. It surveys the fiscal and constitutional outcomes of independence and assesses the relative burden imposed by colonialism. Constitutional asymmetries between revenue collecting and spending agents constrained de facto governments’ power to tax. Inherent disparities embedded in colonial fiscal system worsened with vaguely defined representation for subjects and territories and troubled their aggregation into a modern representative polity. Governments with limited fiscal capacity failed to deliver public goods and to equitably distribute costs and benefits of independence. Growing indirect taxes, debt and money creation allowed them to transfer the fiscal burden to other constituents or future generations. Taxpayers realised the asymmetry between private contributions and public goods and hence favoured a low but regressive taxation. Comparisons with trajectories in the metropolis and the US are offered to qualify this legacy. |
| Keywords: | colonial legacy; institutions; long run development; Spanish America; Spain; fiscal; monetary; constitutional history |
| JEL: | F3 G3 E6 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:wpaper:64804&r=his |
| By: | Kent Deng; Patrick Karl O’Brien |
| Abstract: | Our article is a critical survey of the concepts and data utilized by economists and economic historians that purport to measure relative levels and long term trends in GDP per capita from the Han Dynasty to Communist times. We favour attempts to extend macro-economic analysis and its associated quantification to China’s long imperial history, but have concluded that estimates calibrated in international dollars for 1900, or 2005 or 2011 are not fit for that purpose. Furthermore, and after surveying recent endeavours to reconstruct the published secondary and official statistical sources available for the measurement of primary production for Ming and Qing China (1368-1911), we reluctantly suggest that Kuznetian paradigms for empirical economics are probably not viable, either for the measurement of the empire’s growth over time or for reciprocal comparisons with European economies. This is because on both conceptual and statistical grounds the concept and associated metric for GDP per capita does not travel easily and securely between the fiscal systems of China and the West (Yun-Casallila and O’Brien 2012). |
| Keywords: | GDP accounting; Kuznetsian paradigm; Great Divergence |
| JEL: | Z10 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:wpaper:64857&r=his |
| By: | Tallman, Ellis W. (Federal Reserve Bank of Cleveland); Gorton, Gary (Yale University and NBER) |
| Abstract: | How did pre-Fed banking crises end? How did depositors’ beliefs change? During the National Banking Era, 1863-1914, banks responded to the severe panics by suspending convertibility; that is, they refused to exchange cash for their liabilities (checking accounts). At the start of the suspension period, the private clearing houses cut off bank-specific information. Member banks were legally united into a single entity by the issuance of emergency loan certificates, a joint liability. A new market for certified checks opened, pricing the risk of clearing house failure. Certified checks traded at a discount to cash (a currency premium) in a market that opened during the suspension period. Confidence was restored when the currency premium reached zero. |
| Keywords: | Financial crisis; bank runs; banking panic; clearing house; bank-specific information; currency premium |
| JEL: | E44 E58 N21 |
| Date: | 2016–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1603&r=his |
| By: | Becker, Sascha O (Department of Economics, University of Warwick); Pfaff, Steven (University of Washington); Rubin, Jared (Chapman University) |
| Abstract: | The Protestant Reformation is one of the defining events of the last millennium. Nearly 500 years after the Reformation, its causes and consequences have seen a renewed interest in the social sciences. Research in economics, sociology, and political science increasingly uses detailed individual-level, city-level, and regional-level data to identify drivers of the adoption of the Reformation, its diffusion pattern, and its socioeconomic consequences. This survey takes stock of the research so far, tries to point out what we know and what we do not know, and which are the most promising areas for future research. |
| Keywords: | Protestant Reformation |
| JEL: | N33 Z12 R38 D85 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1105&r=his |
| By: | Anamaria de Aragão Costa Martins; Vicente Correia Lima Neto |
| Abstract: | O presente trabalho, com base em revisão bibliográfica, apresenta fundamentos teóricos que amparam diferentes relações entre forma urbana e sistema de transportes, e explica as principais premissas do planejamento regional da primeira metade do século XX, responsáveis pela configuração de inúmeras áreas metropolitanas. Tomando o caso de Brasília, exemplifica como esses princípios do planejamento regional influenciaram a organização espacial do território. Por fim, demonstra os efeitos da descentralização do território na crescente dependência do automóvel, desvendando os principais problemas relacionados com esse padrão de mobilidade para a capital federal. This article presents a theoretical approach towards the relation between transportation and urban form, explaining the main principles used in the regional planning during the first half of XX century, that influenced several metropolitan areas. Taking the case of Brasilia, it is exemplified how those planning principles oriented the spatial organization of the territory. The article demonstrates the effects of decentralization in the crescent dependence on private transportation, revealing the main commuting problems in the Federal Capital of Brazil. |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:2163&r=his |
| By: | Dmitriy Veselov (National Research University Higher School of Economics); Alexander Yarkin (National Research University Higher School of Economics) |
| Abstract: | This paper studies the impact of inequality in capital and land distribution on the pace of industrialization, thereby explaining the role of wealth inequality in the Great Divergence phenomenon. We build a two-sector unified growth model, in which the outcome of public policy contest between the supporters and opponents of modern sector development determines the pace of industrialization. The distribution of wealth affects the incentives of agents to invest in political conflict, and hence influences the probability of pro-growth policies. We show that while higher inequality in land distribution hampers modern sector development, higher inequality in capital within landless agents is growth enhancing. The strength of the latter effect increases with the amount of accumulated capital. The model also captures the hump-shaped path of conflict intensity observed throughout the industrialization phase. We present several historical narratives that support these results |
| Keywords: | unified growth, public policy contest, endogenous institutions, industrialization, inequality |
| JEL: | D72 D74 N10 O14 O41 O43 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:118/ec/2015&r=his |
| By: | Giampaolo Gabbi (University of Siena and SDA Bocconi Banking and Insurance Department); Elisa Ticci (University of Siena) |
| Abstract: | : Over the last thirty years, the historical increasing expansion of financial systems has experienced a phase of acceleration, the second one after the industrial revolution. During this phase of financialisation, the logic of finance has acquired a significant role in economic decisions of all broad institutional elements: financial and non-financial corporations, government and households. Usually formulated with a negative connotation, the notion of financialisation as an “excessive” growth of finance, however, remains elusive and with vague operative implications. We first discuss different features, manifestations and processes which are encompassed in the second financialisation. We then review the literature on its implications by distinguishing the effects on endogenous sustainability, namely on the functioning of financial systems, and the effects on the social and economic spheres: productive investments, human capital, distribution, resilience and exposure to shocks and to systemic risks. Finally, our critical survey focuses on a recent hot debate on the role of financialisation in shaping the incentives for environmental protection, and in restructuring the interests and power equilibrium among different stakeholders on the uses – current, future and speculative – of environmental goods and services. |
| Keywords: | financialisation, sustainability. |
| JEL: | N20 O16 Q56 |
| Date: | 2014–08–14 |
| URL: | http://d.repec.org/n?u=RePEc:fes:wpaper:wpaper47&r=his |
| By: | Hart, Robert A; Moro, Mirko; Roberts, J Elizabeth |
| Abstract: | This paper investigates the introduction of free universal secondary education in England and Wales in 1944. It focuses on its effects in relation to a prime long-term goal of pre-war Boards of Education. This was to open secondary school education to children of all social backgrounds on equal terms. Adopting a difference-in-difference estimation approach, we do not find any evidence that boys and girls from less well-off home backgrounds displayed improved chances of attending selective secondary schools. Nor, for the most part, did they show increased probabilities of gaining formal school qualifications. One possible exception in this latter respect relates to boys with unskilled fathers. |
| Keywords: | school qualifications; family background; free secondary education; 1944 Education Act |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2015-02&r=his |
| By: | Farley Grubb (Department of Economics, University of Delaware) |
| Abstract: | I decompose Virginia's paper money into expected real-asset present value, risk discount, and transaction premium or "moneyness" value. The value of Virginia's paper money was determined primarily by its real-asset present value. The transaction premium was small. Positive risk discounts occurred in years when treasurer malfeasance was suspected. Virginia's paper money was not a fiat currency, but a barter asset, with just enough "moneyness" value to make it the preferred medium of exchange for local transactions. Compared with alternative models, my decomposition model of inside monies is superior conceptually and statistically for explaining the performance of American colonial paper monies. |
| Keywords: | asset money, bills of credit, counterfeiting, fiat currency, quantity theory of money, transaction premium, treasury notes, zero-coupon bonds |
| JEL: | E42 E51 H60 G12 N12 N22 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:dlw:wpaper:16-01&r=his |
| By: | Aylin Topal (Middle East Technical University); Ozlem Celik (Middle East Technical University); Galip Yalman (Middle East Technical University) |
| Abstract: | This paper examines transformation of urban development in its repercussions in urban politics in Ankara since the 1920s with particular emphasis on the post-1980 period. It focuses on management mentality and finance mechanisms of housing policy in the city. This case study paper on Ankara shows that integration of urban land and housing with financial markets has been one of the central tendencies of neoliberal political economy particularly in the 2000s. The paper also notes that the case study epitomizes changing role of the state in creating urban rent and enabling and fortifying the link between the construction and banking sectors. |
| Keywords: | Ankara, housing, city planning, financialization, built environment, TOKI, Justice and Development Party. |
| JEL: | E44 R31 R21 G21 |
| Date: | 2015–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:fes:wpaper:wpaper116&r=his |
| By: | Mary S. Morgan |
| Abstract: | How did the ‘glass ceiling’ and related characteristics of female labour force experience become recognised as a proper object for social scientific study? Exploring interactions between the contexts of discovery and justification reveals how this phenomenon was recognised and established by combining different forms of expertise and experience that came from both within and without the social scientific fields. The resulting object of study might well be described as embedding a ‘civil or community ontology’, for the intersections of facts and values in these different knowledge communities was equally important in defining the content of that object of research. |
| Keywords: | knowledge communities; civil ontology |
| JEL: | N0 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:wpaper:64807&r=his |
| By: | Tim Kane |
| Abstract: | The number of U.S. troops deployed has been trending downward over the short and long terms, and is projected to reach zero before mid-century. This paper analyzes a unified dataset of U.S. troop deployments from 1950 to 2015, including annual estimates of “boots on the ground†in hundreds of countries. Linear and nonlinear forecast models of troop levels agree that total and deployed U.S. troop levels are declining rapidly. The trends are paradoxical as they contrast with an increasing number of countries where U.S. troops are based above three different threshold levels of troops in country per year. Econometric tests of causality indicate a link runs from total troop levels to deployments, but not vice versa, implying that a smaller U.S. military will indeed cause foreign policy to be less directly engaged. |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:hoo:wpaper:16101&r=his |
| By: | Sergio Nisticò (University of Cassino and Lazio Meridionale) |
| Abstract: | Hermann Heinrich Gossen (1810-1858) — a civil servant who, in 1854, published at his expense the book Entwickelung der Gesetze des menschlichen Verkehrs und der daraus fließenden Regeln für menschliches Handeln — has traditionally been considered a forerunner of the neoclassical theory of consumption based on the law of diminishing marginal utility. It is only with the long-awaited publication, in 1983, of the English translation of Gossen’s book, that his editor, Nicholas Georgescu-Roegen, started to see in The Laws of Human Relations and the Rules of Human Action Derived Therefrom the roots of a wholly different theory of consumption in which the flow of calendar time plays a crucial and non-trivial role. By going through the works of Jevons, Menger and Walras, the paper argues that the logical and theoretical connection between Gossen’s approach to consumption choices and the marginalist school is unwarranted. Theoretical connections, if any, can be found between Gossen and the classical economists on the one hand and the English ‘liberal’ tradition of John Stuart Mill and J.M. Keynes on the other. |
| JEL: | B13 D01 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:csn:wpaper:2016-01&r=his |
| By: | Judith Tyson (School of Oriental and African Studies, University of London); Terry McKinley (School of Oriental and African Studies, University of London) |
| Abstract: | This research paper has focused on global cross-border trends in private capital flows, along with reviewing trends in trade, international reserves, external debt, remittances and ODA. The paper covers the general period between 1980 and 2013. Within private capital flows, it investigates FDI, Portfolio Flows and Financial Flows (net bank lending) and analyses the trends of these three flows over four periods: 1980-1990, 1991-2002, 2003-2007 and 2008-2013. It finds that during 2003-2007 there was a sharp upswing in cross-border private capital flows, coinciding with the general rise of the forces of financialization. This intensifying trend culminated in the global financial crisis in 2008. As a result, during the last period, 2008-2013, there was a sharp contraction in portfolio flows and financial flows. Among developing regions, Developing Asia fared the best during this period. However, Middle-Income Countries (MICs) were, in general, the hardest hit by the financial crisis and the volatility of private capital flows. This was due to the fact that such flows were highly concentrated in these countries. More recently, MICs have suffered from precipitous capital outflows as a result of the withdrawal (or planned withdrawal) of quantitative easing by central banks in the developed world. |
| Keywords: | foreign direct investment, portfolio flows, financial flows, net bank lending, financial crisis, external debt |
| Date: | 2014–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:fes:wpaper:wpaper38&r=his |
| By: | Thomas Barnay; Emmanuel Duguet; Christine Le Clainche; Yann Videau |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:tep:teppwp:wp16-01&r=his |
| By: | Cerrada-Serra, Pedro; Ortiz-Miranda, Dionisio |
| Keywords: | Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa148:229268&r=his |
| By: | Demirguc-Kunt,Asli; Horvath,Balint Laszlo; Huizinga,Harry P. |
| Abstract: | This paper examines how the ability to access long-term debt affects firm-level growth volatility. The analysis finds that firms in industries with stronger preference to use long-term finance relative to short-term finance experience lower growth volatility in countries with better-developed financial systems, as these firms may benefit from reduced refinancing risk. Institutions that facilitate the availability of credit information and contract enforcement mitigate the refinancing risk and therefore growth volatility associated with short-term financing. Increased availability of long-term finance reduces growth volatility in crisis as well as non-crisis periods. |
| Keywords: | Debt Markets,Banks&Banking Reform,Access to Finance,Emerging Markets,Bankruptcy and Resolution of Financial Distress |
| Date: | 2016–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7535&r=his |