Structural change in the Dutch trade with the baltic in the eighteenth century

Abstract

Affluence easily veils failure and cripples creativity. In the eighteenth century, the Dutch Republic probably enjoyed the world's highest national per capita income. The Republic was the first state to ascend beyond the modest pre-industrial income levels, interestingly enough without itself industrializing. Yet, economically the Republic stagnated visibly. Ships on the international routes increasingly passed Amsterdam by and trade — the old foundation of prosperity — declined in the midst of a general revival of North and West European commerce. The stagnation affected all walks of economic life and created a feeling of resignation that baffled many attempts at redress.¹ The fascination with the fate of the Dutch Republic in the eighteenth century arises in part from this juxtaposition of affluence and decay. Did structural change cause the decline of Dutch trade or was it precisely the want of structural adjustments that became fatal? There is a great deal of confusion in Dutch historiography on this issue. Johan de Vries — to start with the Nestor among the historians of the Dutch decline — speaks of ‘structural alterations in the trade’ that ultimately undermined the position     

Burn-beating as the technical basis of colonisation in Finland in the 16th and 17th centuries

Abstract

In the forest regions of northern Europe burn-beating has always been associated with the clearance of previously untilled land and human settlement. Colonisation based on burn-beating continued in Finland well into modern times, and burn-beating was practised in many places even after the period of first settlement. In Finland's eastern provinces of Savo and Karelia, it was still the predominant form of cultivation in the 18th century; in these provinces it played an essential role in farming into the early 19th century and it was not until the latter part of the century that burn-beating began to die out because of the rapid growth of the timber trade; it finally disappeared only in the early 20th century.     

Trade between Finland and Russia in 1860–1917

Abstract

In his thesis, published in September 1970, Dr. Erkki Pihkala traces the trade relations between Finland and Russia in 1860–1917 against the background of the development of trade and industry in the two countries and their political relations with one another. In addition to this main study he has published complementary minor papers on certain special aspects, all of which we review here.     

Loan Loss Provisions,Earnings, Capital Management and Signalling: Evidence from Indian Banks1

Abstract

The debate on bank capital regulation has in recent years devoted specific attention to the role that bank loan loss provisions play as a part of the overall minimum capital regulatory framework. The paper examines this issue in the Indian context, exploring the available evidence about bank loan loss provisioning in the Indian context. Using data on Indian banks for 1997–2005, evidence is found in favour of both earnings and capital management by Indian banks.     

Tracing Trade Interdependence between EU and East Asia

Abstract

There have been two related trends shaping global trade during the past couple of decades: the increasing role of international supply chains and the rise of China. Increased complexity in global trade has generated a need to construct more processed trade data — trade in value added — in order to deepen our understanding of trade relations between countries. In this article, we present a broad picture of trade in value added between the EU28 and East Asian countries. We find that East Asia is important as a final demand and supply chain export destination, especially for Northern European countries, while for CEE countries it is more important as an import source for both final demand and supply chain trade. Trade with East Asia is least important for Southern European countries. The production structure of an EU country seems to be one of the main factors explaining the importance of supply chain trade with East Asian countries. The data also suggest that supply chain trade could support the growth of domestic value-added exports to the supply chain trade partner country as well as to other countries.     

China and India in World Trade: Are the Asia Giants a Threat to Malaysia?1

Abstract

With higher shares in world merchandise trade and improvements in product quality, China is better positioned than India in the near term for influencing global trade. From the Malaysian perspective, China represents a non-negligible share in Malaysia's trade. The trends in bilateral trade with both Giants however suggest that competition has intensified. Relative to India, China appears to promulgate a more influential role on Malaysia via higher commodity overlap in external markets, greater matched trade that is of vertical differentiation, distinct quality shifts and negative adjustment pressures. Within this broad rubric of trade-induced changes, there is no evidence of skill upgrading for Malaysia in trade expansion with both Giants. This mirrors the lack of product quality improvements and the low levels of export values of high quality varieties in matched trade. Hence trade induced changes from the Giants that have been cited to be favourable from the Malaysian perspective in previous studies, may have been grossly overstated.     

Book Review

Abstract

The importance of Swedish iron ore to the re-armament and wartime economy of Nazi Germany has been touched upon in a number of writings about the international politics of the period here under review. Erik Lonnroth has demonstrated how the question of continued ore deliveries constituted the flashpoint of Swedish-German relations during the 1930s.¹ Gunnar Häggläf describes the Swedish Foreign Office's balancing act between English and German desires in regard to the ore trade, and their role in the regulating of trade with the two belligerents in the autumn of 1939.² Magne Skodvin has explored the strategic and economic aspects of the attack on Norway and Denmark on 9 April 1940.³     

The problem of railway ownership in 19th century Finland

Abstract

Dr. Oredsson's extremely able and original doctoral dissertation! is concerned primarily with the issue of state versus private railway policy in certain countries. So far as Finland is concerned, he confines himself to strategic considerations, dismissing the subject of ownership with the statement: ‘All railways of major importance were built by the State’ (p. 23). The impression gained by the reader is that from the outset State ownership was regarded as self-evident in Finland. This, however, was not the case. My intention in this note is not to criticise Oredsson, but to supplement his account of the railway policy of Sweden's eastern neighbour.     

Handbook of New Institutional Economics

Abstract

Recent Scandinavian work on the relationship between exports and economic growth gives preference to home market factors as opposed to foreign demand, thus strengthening the view that growth is home-led rather than export-led. This article claims that the difficulty in determining the causal role of exports stems from the failure to differentiate between individual industries and macro-economic growth. Addressing the macro-aspect, the argument, called the ‘export specialization theory’, is developed that for small countries trade and pro-trade policies have been central to their economic success; moreover; in these cases it makes no sense to distinguish between home-led or foreign-led development, since by definition trade includes both demand and supply factors. In the light of this clarification the current controversy about the causal role of exports for successful growth in small countries disappears. By way of conclusion, the article argues that country size may prove to have been a critical variable in successful economic growth.     

The transatlantic tar trade

Abstract

The tar trade has been of especial interest to Finnish commercial history, as tar has been regarded as Finland's main export article in the seventeenth and eighteenth centuries.¹ However, the studies of Professor Aulis J. Alanen suggest that this was no longer the case during the final phase of the Swedish regime, when the boom in shipbuilding for export, the new sawmill industry and the rising incomes from freights reduced the share of tar exports in the balance of payments. The significance of tar production and the tar trade was nevertheless fairly considerable for a long time in Northern Finland.     

Comment

Abstract

When I started the study which has been discussed in the preceding review, advertisements for an assistant were put into Le Monde and The Economist. There were about one hundred applicants, of which ten were selected for personal interview. One of them was Dr. William N. Parker who was at that time in the Ruhr, working on a study of the German steel industry. I have often said and I repeat it now, after having read his review of my book, that one of the greatest mistakes I have made was not to engage Dr. Parker as a member of my small research team. I am very gratified that he, nevertheless, has taken the trouble to penetrate so deeply into my study.     

Finnish foreign trade in the 18th century

Abstract

In this comprehensive study, Professor Alanen deals with Finnish foreign trade and shipping from the opening of the 18th century until roughly the time of Finland's secession from Sweden in 1809.     

The transfer of peasant forest to sawmill companies in Northern Sweden

Abstract

The 1840s inaugurated a period of expansion for timber exports from Norrland which lasted for over thirty years:¹ its background was rising West European demand and the evolution of a system of international free trade, led both in commercial policy and in the market, by England and France. This caused the traditional regions for international timber supply to lose ground relative to the new Swedish competitor. In Norrland early in the nineteenth century large tracts of forest had been handed over by the state to independent peasants, and in many cases title to these forests was subsequently passed on by various means to expanding sawmill companies. The consequences of this were investigated by government committees which reported both social perils and depletion of the forests;² depredations caused by such companies were thus placed under restrictions. The right of free contract was limited in the 1880s by regulating certain types of forest leasehold agreements. At the same time, however, sawmill owners began buying forest lots on such a scale that the very existence of the independent peasant class in Norrland was thought to be threatened. More radical counter-measures were demanded, and were brought into effect in 1906 when the purchase of peasant land in Norrland by companies was prohibited.³ The mutual dealings of peasants and companies gradually came to be viewed as social conflict, and even as a form of class struggle. It is therefore of particular interest to investigate the precise character and scope of the terms under which forest land was transferred: this article will examine the problem in a limited period. Since the evolution of the timber industry in Norrland was by no means uniform, partly because natural conditions varied from place to place, the present enquiry should be regarded as a case-study.     

Fighting the forces of gravity - Seapower and maritime trade between the 18th and 20th centuries

How have large naval powers affected international commerce in history? Using a panel gravity model, we investigate the interactions of wars, alliances, naval power and trade from the 18th to mid-20th centuries. Striking an alliance with a naval power helps a country’s interstate commerce. Fighting a naval power on the other hand limits a country’s interstate commerce. Further, we split this effect on trade between an extensive effect (effect on a country’s trade when fighting a naval power) and an intensive effect (effect of that power gaining more naval strength). We conclude that the intensive effect is a powerful one - large navies have historically been destroyers of trade when mobilized to combat.     

Shocks to Terms of Trade and Risk-premium in an Intertemporal Model: The Dutch Disease and a Dutch Party

In this paper, we analyze the impact of terms of trade and risk-premium shocks on a small open economy in an intertemporal Dutch disease model, with international capital mobility. Given that an improvement in the terms of trade is associated with a decrease in the risk-premium on lending to this economy, we find that this can lead to a Dutch party (rather than Dutch disease) in which real exchange rate appreciation is associated with an expansion of the capital-intensive traded sector, hence, pro-industrialization. The economy also accumulates more debt in the long-run in response to the lower borrowing costs.

Occupational Mobility Pattern in Chonju,Korea

This paper investigates the existence of the inter‐dependence between the Indian stock market and Asia's emerging markets since 1990. This study analyzes whether the MSCI Asian Index has significantly influenced the Bombay Stock Exchange Index before, during, and after the Asian financial crisis. To address this issue, the author first uses a rolling correlation, and conduct uni‐directional and bi‐directional causality tests using the Granger causality test. He then examines the impulse response functions and variance decompositions of forecast errors based on a VAR (vector auto‐regression) model. These tests provide evidence that the influence of the Asian market on the Indian market has increased during and after the Asian financial crisis. These results can be interpreted as evidence that the Indian market has been moving toward integration with other Asian markets.     

Jelle Zilstra: A versatile economist

Summary In 1983 Dr. Jelle Zijlstra was a member of the board of editors ofDe Economist for 35 years. At the request of his co-editors, this article has been written to put in a clear light the person and work of Dr. Zijlstra. Zijlstra has been a professor of economics, a minister of economic affairs and of finance in several Dutch cabinets, and, from 1967–1981, President of the Netherlands Bank. During these activities he has made important contributions to economic theory and economic policy, both in legislative work and in various publications. In this article his valuable contributions in such different fields as economic competition, economic order, public finance, monetary theory and central banking policy are analyzed. The author comes to the conclusion that Dr. Zijlstra is an original thinker, who has been a stimulating and inspiring contributor to the different fields of economic theory and economic policy in which he has been active. The author thanks Professor P. Hennipman and Professor S. K. Kuipers for their valuable suggestions.     

Sources of and Responses to the Liability of Foreignness: The Case of Korean Companies in the Netherlands

Abstract

This study aims to investigate the liability of foreignness, or the additional difficulties of foreign companies compared to their local competitors. Past studies have found fair amount of empirical evidences for the liability of foreignness. The present study attempts to take one step further by addressing two questions: what are the sources of such disadvantages and what are the solutions sought by the companies? To do this, we conducted a field study exploring the on-going dynamics of foreign multinationals. Specifically, we collected primary data through interviews with Dutch and Korean managers of Korean multinational companies. Through the interviews, we found evidence for the existence of such disadvantages. We identified four sources of the liability of foreignness—cross-border transfer, interaction with the local government, local discrimination, and interaction within the multinational—and two ways in which these companies actively reduced their exposure to the problem—localization and unfamiliarity reduction. This study should be useful to both practitioners and theorists in international business with an interest in disadvantages connected to the foreign status of a company.     

Swedish foreign trade in the mid-sixteenth century

Abstract

For many years our image of economic conditions in 16th-century Sweden has been that depicted by Eli F. Heckscher: a medieval economy, reorganised by a central government of increasing authority in the person of King Gustav Vasa, and gradually transformed after his death in 1560. Sweden's foreign trade appeared to Heckscher as a particular example of his general rule. Its role in the national economy as a whole was very small: such commodities as were imported in exchange for exports were for the most part luxury goods; the only notable exception was the import of salt, to which Heckscher assigned extreme importance, because a vast consumption of salted food featured in his concept of the Swedish ‘medieval’ pattern of overall consumption. Heckscher saw no reason to postulate any major changes in the form and direction of Swedish trade during the reign of Gustav Vasa himself (1521–60); on the contrary, a theme vigorously argued in his book is that the political liberation of Sweden from the influence of Liibeck in the 1530s did not produce any shift of trade routes: most Swedish foreign trade still went via Lübeck. The customs ledgers of a single year, 1559, had an important influence on Heckscher's views.     

Chinese and Indian Multinationals: A Firm-Level Analysis of their Investments in Europe

Abstract

This paper contributes to the literature on Chinese and Indian multinationals investing in Europe through an empirical investigation about their identity, their characteristics and the association between their features and their international strategies. The investigation exploits a database, named EMENDATA (Emerging Multinationals’ Events and Networks DATAbase), at the level of the investing firms. In relation to the mode of entry, we find that greenfield investments are a more likely option for large-sized companies. Moreover a high propensity for innovation is associated with a high probability to enter with an acquisition and with technological asset-seeking investments. Finally, high profitability is needed to invest in the EU-core countries.