The Current State of Business History in Latin America

Business history in Latin America has seen significant growth in the past 25 years, most notably since the beginning of this century. Although the sub‐discipline benefitted from seminal studies by British and U.S. scholars, most works of note are currently produced by local scholars. Latin American business history holds great comparative potential for business historians in other parts of the world undertaking studies in the areas of emerging economies, business‐state relationships, the role of entrepreneurship, business groups, entrepreneurial families, and foreign investment and imperialism.     

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.     

Drivers of technical efficiency in Malaysian banking: a new empirical insight

Restructuring and rationalisation of Malaysian banking in 2000 and the subsequent policy of deregulation and liberalisation adopted by Bank Negara Malaysia (BNM) have resulted in a significant transformation of Malaysian banking. Banks are now poised to play a pivotal role in the economic transformation of the economy as envisaged in the Financial Sector Blue Print 2011–20 of BNM. Using the data envelopment analysis technique, the technical efficiency of 19 commercial banks (8 domestic banks and 11 foreign banks) operating in Malaysia during 2005–12 is evaluated. Then, using bootstrap‐corrected efficiency scores, the drivers of bank efficiency were estimated using the Tobit regression approach. Results clearly show that three large domestic banks are not only more efficient than their counterparts, but are also more efficient than the foreign banks. Bank size and return on assets are found to be the significant drivers of technical efficiency of Malaysian banks. Capital adequacy and the advances to deposit ratio also have a role in driving technical efficiency. The results also indicate that banks that are more effective in managing credit risk, as reflected in a lower level of non‐performing assets as a percentage of total assets, and have lower levels of personnel expenses to total assets, are more efficient. The findings have significant implications at the individual bank level and also at the policy level.     

THE MECHANISM FOR STATE‐LED CREATION OF MALAYSIA'S MIDDLE CLASSES

This paper analyzes the mechanism for creation of middle classes in Malaysia since 1971 The United Malays National Organization‐led government has implemented three long‐term development plans. One of the objectives of the New Economic Policy (NEP) for raising the economic positions of the Bumiputera (sons of the soil) was to create Malay middle classes. The development process has taken place in three phases: from the launching of NEP in 1971 to 1981, the first half of the Mahathir administration, and from 1991 to the present At the start of NEP, the government had an ambiguous idea about simply creating Malay middle classes. After the 1980s, however, Mahathir emphasized creating middle classes in relation to his industrialization policy In order to achieve its target and intention, the Malaysian government has changed its role in accordance with the targets it has sought.     

THE SUPPLY OF ECONOMIC HISTORY IN AUSTRALASIA: THE AUSTRALIAN ECONOMIC HISTORY REVIEW AT 50

In 2010, the Australian Economic History Review published its 50th volume. To mark the occasion, we present a quantitative analysis of the output of economic and business history that has appeared in its pages since 1956, and review the development of the discipline through its journal editors. Content was until recently overwhelmingly focused on Australia and New Zealand economic and business history, despite the efforts of past editors to attract more scholarship on the wider Asia‐Pacific region. Articles on Asia and the rest of the world have become more common since the late 1990s.     

Bank Lending and Inflation in Malaysia: Assessment from Unrestricted Error-Correction Models

The paper estimates inflation models for Malaysia by considering the influence of bank lending. The unrestricted error-correction model (UECM) proposed in Pesaran et al. (2000) was employed as being appropriate for small sample analysis such as the present study which covered annual data from 1973 to 1997. The results of 'bounds' tests confirmed a long-run equilibrium relationship between inflation and its determinants, namely import price, money supply (M3), bank credit and real income. The estimated UECMs revealed that the important factors in the Malaysian inflation process are import price and real-income variables. It was found that concurrent fiscal policies had a major influence on the impact of the depreciation of the naira on inflation. The UECMs appear to perform well and to provide an appropriate framework for forecasting the Malaysian inflation behaviour.     

The Money-prices Nexus for Malaysia: New Empirical Evidence from the Time-varying Cointegration and Causality Tests

Abstract

The main objective of this study is to empirically re-investigate the money-prices nexus for Malaysia through the Johansen multivariate cointegration and the modified Wald (MWALD) causality techniques. This study covered the monthly dataset from 1971:M1 to 2008:M11. The Johansen cointegration test suggests that the variables under investigation are co-move in the long run. Furthermore, the MWALD causality test shows a bidirectional causal relationship between money supply (M2) and aggregate prices, meaning that both the monetarist's and also the structuralists' views are vindicated in the Malaysian economy. However, the time-varying cointegration and causality tests indicate that the cointegrating and also the causal relationships are not stable over the analysis period. These results suggest that inflation in Malaysia is not purely a monetary phenomenon. Therefore, implementing a tighter monetary policy may not be an effective macro-economic instrument in managing the inflationary behaviour in the Malaysian economy.     

The Post‐Mao economic reform in China: A Korean view

Abstract

Previous studies that were concerned with the impact of depreciation of the ringgit on the Malaysian trade balance employed data either between Malaysia and rest of the world or between Malaysia and each of her major trading partners. Specifically, the bilateral trade balance between Malaysia and the US is shown to be insensitive to the real bilateral ringgit–dollar rate. In this article we wonder if disaggregating trade flows between Malaysia and the US by commodity could help us to discover any significant effects that the real exchange rate could have. We consider 101 industries that export from US to Malaysia and 17 industries that import from Malaysia. While majority of the industries showed short-run sensitivity to the real bilateral exchange rate, short-run effects lasted into the long run almost in half of the industries in both group.     

BOOK REVIEW

Book Reviewed in this article: The Politics of Chinese Unity in Malaysia: Reform and Conflict in the Malaysian Chinese Association, 1971–73 by Loh Kok Wah     

MONETARY POLICY IN A SMALL OPEN ECONOMY: THE CASE OF MALAYSIA

This paper provides a case study to characterize the monetary policy regime in Malaysia, from a medium‐ and long‐term perspective. Specifically, we ask how the Central Bank of Malaysia, Bank Negara Malaysia (BNM), has structured its monetary policy regime, and how it has conducted monetary and exchange rate policy under the regime. By conducting three empirical analyses, we characterize the monetary and exchange rate policy regime in Malaysia by three intermediate solutions on three vectors: the degree of autonomy in monetary policy, the degree of variability of the exchange rate, and the degree of capital mobility.     

USING AUTOBIOGRAPHIES IN BUSINESS HISTORY: A NARRATOLOGICAL ANALYSIS OF JULES JOUBERT'S SHAVINGS AND SCRAPES

Entrepreneur autobiographies provide business historians with the opportunity to connect storytelling and identity, topics that are now prominent in economic debate. Yet lingering concern about the subjectivity of life writing prevents wider use of autobiographies within business history. This article seeks to allay such concern by applying the narratological method to the colonial entrepreneur Jules Joubert's autobiography, Shavings and Scrapes. Joubert's narrative identity is as an ‘adventurer’. This identity shored up his self‐image and was used by him to enhance his reputation. Narratology shows that an autobiography can stabilise and publicise the colonial entrepreneur's narrative identity, thereby benefiting their business career.     

马来西亚的农村经济发展策略

本文主要探讨1957年独立以来,马来西亚农村经济发展策略的演变及其成效,并总结出几点有益的启示,包括注重提高农民收入,提高单位农业收入和发展农村工商业等。     

AUSTRALIAN IMMIGRATION ARCHIVES AS SOURCES FOR BUSINESS AND ECONOMIC HISTORY

The administration and control of immigration to Australian during the twentieth century produced a huge archive of records of individual migrants that have potential for innovative approaches to the business and economic history of ethnic minority groups. This article describes some of these records, which have mostly been used by amateur family historians, focused on those related to Chinese immigrants before the World War II and Southern Europeans immigrants after 1945. The article gives examples of how these records can be used, suggests potential research projects, and discusses briefly some of the guides available. Several images of these archival documents are reproduced.     

ETHNIC BUSINESS AND ECONOMIC EMPOWERMENT: THE AFRIKANER CASE, 1915‐1970

The struggle for racial or ethnic group worth is an important socio‐political issue in societies where a minority ethnic group, like the English‐speaking whites in South Africa or the Chinese in Malaysia, dominates the economy but not the political system. There are two routes to the empowerment of an economically backward group. In the Afrikaner case, economic mobilisation formed part of a general ethnic mobilisation. While the Afrikaner‐controlled state after 1948 massively aided all whites, Afrikaner business increased its market share through serving a niche market. It received little ethnic patronage from the state or assistance from English corporations. A quite different from of advancement is that driven by the state, which imposes on large corporations the obligation to promote the economic empowerment of a racial group. While the first form facilitated the rise of the ethnic group as a whole, the latter one benefited mainly a business and middle class elite that may remain dependent on continuing state support.     

Ethnic group returns to education during the early post‐colonial period in Malaysia

The paper examines the returns to education for ethnic groups in the Malaysian labour market during the early 1960s' post‐colonial period. The analysis is based on data from the West Malaysia Family Survey of 1966–67. It is found that individual returns to education were positive during the period examined. However, the returns to education of particular ethnic groups differed. The findings suggest that ‘equal education for all’ does not guarantee that each ethnic group will receive equal wages unless there are other interventions in the labour market.     

Estimating Cost Functions of Malaysian Commercial Banks: The Differential Effects of Size,Location, and Ownership*

Bank integration and competition policies are a core part of current financial reforms intended to strengthen the financial sector in Malaysia. This paper intends to clarify the production technology employed in Malaysian banks and indicate important policy implications for current bank consolidation policy. While it is essential to conduct a microeconomic analysis of the banking sector to appraise financial reform policy, Katib and Mathews (2000) is the only formal study in this area that uses micro level data on Malaysian banks. Our analysis expands on Katib and Mathews’ study in three aspects. Firstly, while Katib and Mathews employed Data Envelopment Analysis, we use estimation analysis based on a parametric approach. Secondly, we examine technological differences among Malaysian banks according to the size of operations, location of branches and ownership structure. Thirdly, we also explicitly incorporate the existence of hidden bad loans in estimating cost functions. According to our estimation analysis, there is a difference in production technology between large‐sized banks and small or medium‐sized banks. While economies of scale are observed for large‐sized banks, no economies of scope and technological progress are observed for any banks. The results of our analysis suggest that, while the current reform policy is basically appropriate, serious problems remain regarding bank consolidation and the lack of market competition.     

Role of Education in Cigarette Smoking: An Analysis of Malaysian Household Survey Data*

Heckman's sample selection model is used to examine the role of education on household purchase decisions and expenditures of tobacco products in Malaysia. Results of the marginal effects of education, segmented by ethnic and gender groups, suggest that education decreases the probability, conditional levels and unconditional levels of tobacco expenditures amongst Malaysian households. Specifically, an additional year of education of the household head, irrespective of ethnic or gender considerations, decreases smoking probability by 1.5 percent. However, the negative effect of education seems to be higher for Chinese (US$1.07) than Malay (US$0.26) households in terms of conditional expenditures. Furthermore, education significantly decreases conditional tobacco expenditures within male‐headed households.     

PARCHING THE LAND?: THE CHETTIARS IN BURMA

In the history of Burma's economy, few groups have been as vilified as the Chettiars. A community of Indian moneylenders, the Chettiars were crucial agents in transforming Burma into the rice bowl of Asia. Following the global depression of the 1930s, Burmese agriculture became severely distressed and wide-scale loan default saw the transfer of much of Burma's cultivatable land to the Chettiars, who were demonised and made scapegoats for the vices of colonialism. The paper draws on the 'information-theoretic revolution' in economics to reappraise the role of the Chettiars in Burma. We conclude the Chettiars merit history's better judgement.     

Determinants of Malaysian Trade Balance: An ARDL Bound Testing Approach

Abstract

This paper examines the short- and long-run relationships between trade balance, real exchange rates, income and money supply in the case of Malaysia. The inclusion of income and money variables in the study is purposely to examine the monetary and absorption approaches to the balance of payments beside the conventional approach of elasticity, using exchange rates. Using the bound testing approach to cointegration and error correction models, developed within an autoregressive distributed lag (ARDL) framework, we investigate whether a long-run equilibrium relationship exists between trade balance and the determinants. Additionally, we adopt an innovation accounting by simulating variance decompositions (VDC) and impulse response functions (IRF) for further inferences. Using this approach, we find evidence of a long-run relationship between trade balance and income and money supply variables but not between trade balance and real exchange rate. The findings also suggest that Marshall–Lerner condition does not hold in the long-run for Malaysia and for policy wise the Malaysian trade balance/balance of payments should be viewed from absorption and monetary approaches.     

We Used to Get and Give a Lot of Help: Networking,Cooperation and Knowledge Flow in the Hunter Valley Wine Cluster

The Hunter Valley, New South Wales, is both Australia's oldest continually producing wine region and a highly functioning wine business cluster. New generation cluster actors perceive that the region's concentration of historic family‐based firms has contributed to its strength. We have used rarely consulted and newly accessioned evidence from the 1820s to the 1920s to qualitatively test the extent to which early networking created pathways for knowledge flow in the region. Our cross‐disciplinary research into the historic depth of embedded cooperation reveals a little known feature of early Australian business history and complements the more commonplace breadth approach in cluster studies.