The strength and persistence of entrepreneurial cultures

The twentieth century United States provides a natural experiment to measure the strength and persistence of entrepreneurial cultures. Assuming immigrants bear the cultures of their birth place, comparison of revealed entrepreneurial propensities of US immigrant groups in 1910 and 2000 reflected these backgrounds. According to this test North-western Europe, where modern economic growth is widely held to have originated, did not host unusually strong entrepreneurial cultures. Instead such cultures were carried by persons originating from Greece, Turkey and Italy, together with Jews. The rise of widespread female entrepreneurship provides additional evidence by showing that this trait systematically responded less strongly, but in the same way, to cultural background as did male entrepreneurship

Firm-level evidence for the language investment effect on SME exporters

Both analysis of international trade and the knowledge resource theory of the firm imply that language skills should play a vital role in exporting. This may be apparent to large multinationals with sites in many different linguistic locations, but we show it is less obvious to smaller companies. With data on the language used by each of a large sample of European small and medium sized enterprises in their export markets we test and estimate the effects of language assets on language performance in export markets and on export sales. Controlling for the possibility that language skills may be acquired by exporting, we find a very substantial export return to linguistic expertise, indicative of unexploited gains from investment in languages. There is also evidence of greater under-investment in language skills in English-speaking Europe, which we show can be a prediction of Konya’s (2006) trade model

Spontaneous Disorder? A Very Short History of British Vocational Education and Training, 1563-1973

A distinctive feature of the British approach until the 1960s was that vocational education and training (VET) should be provided by employers. This is conventionally contrasted with the much more formal state coordinated approach of Germany. The question posed is whether the British style was the ‘spontaneous order’ that results because markets use information efficiently about the supply of and demand for skills. Alternatively, was it ‘spontaneous disorder’ in which the absence of standards and coordination led to underinvestment in VET and economic decline relative to those countries with strong leadership in education and training? There is considerable evidence in the twentieth century that Britain suffered from shortcomings in the availability of highly trained labour. The most credible explanation is the organisation and operation of the VET system; the perceived self-interests of undereducated employers and restrictive unions during booms and slumps provided inadequate conditions for efficient employer-led education and training

Great recessions compared

Like the Great Depression of the 1930s, the current great recession triggered strong criticism of economists and economics. It is contended here that economists’ majority opinion rightly recommended that, in the face of collapses of aggregate demand, countercyclical fiscal and monetary policies, built in stabilisers and a regulatory system to maintain free trade were appropriate remedies. Economists may have under-estimated the stability of markets and the tightness of prudential regulation for reducing the severity of potential crises. But their assessments anyway are likely to be discounted if powerful industry lobbies judge they will constrain profits, rather than boost them. These propositions are developed in a comparison of the two Great Recessions in the United States, the United Kingdom, France and Germany

UK corporate law and corporate governance before 1914: a re-interpretation

The consensus among legal and economic historians that British law between 1844 and 1914 provided little protection to corporate shareholders is based on formal provisions in the Companies Acts. In fact these Acts applied only to companies registered by the Board of Trade. Moreover corporate law for statutory companies was codified in the Companies Clauses Consolidation Act of 1845. We show that, while the governance rules of private companies were largely unconstrained, for most of the Victorian period most capital in quoted companies (which were mainly statutory) scored highly on the "anti-director" rights index under mandatory rules. When registered companies came to dominate stock exchanges, nearer the end of the nineteenth century, they voluntarily adopted similar rules, which professionals serving the stock exchange and IPOs recognised had advantages for raising capital. The main exception was the omission of tiered voting rules (whose record in protecting minorities was at best debatable), in favour of one-share-one-vote. Unlike the prevailing consensus, our reinterpretation is consistent with evidence on the large size of the London Stock Exchange and extensive divorce of ownership from control in listed UK companies before 1914

Inter-regional mobility of entrepreneurial SMEs

Expanding, entrepreneurial, enterprises move from high cost (congestion, wages and rent) locations where they innovated to low cost (smaller, less agglomerated) places suitable for standardised production. Net inter-regional relocations of British SMEs are predicted in part by this development pattern. SMEs that relocate are more productive, relatively larger and younger, as well as more probably initially located in London and the South East (core locations). These fast growing businesses become even more productive and employ even more workers after moving than regionally immobile SMEs. In this respect the UK regional core supports the periphery through a market process. Relocation is also a strategy for contracting enterprises, but not necessarily a helpful for smaller companies

Human Capital and Economic Growth: Pakistan 1960-2003

This paper investigates the relationship between human capital and economic growth in Pakistan with aggregate time series data. Estimated with the Johansen (1991) approach, the fitted model indicates a critical role for human capital in boosting the economy’s capacity to absorb world technical progress. Much higher returns, including spillovers, to secondary schooling in Pakistan than in OECD economies is consistent with very substantial education under-investment in Pakistan. Similarly, extremely large returns to health spending compare very favorably with industrial investment. Human capital is estimated to have accounted for just under one-fifth of the increase in Pakistan’s GDP per head. Since the 1990s, the impact of deficient human capital policies is shown by the negative contribution to economic growth

Business and social mobility into the British elite 1870-1914

This paper tests the claim that business stimulated general social mobility into the British elite during the heyday of the laissez-faire Victorian economy. It also investigates an alternative hypothesis that the ‘rise of the professions’ was the main driver. Intergenerational mobility into the elite was indeed higher among those with manually employed fathers working in business than among the non-business elites in Britain between 1870 and 1914. In addition two potential influences on mobility, education and religion, varied significantly between the classes. Educational divergences reflected the different markets at which those upwardly mobile in business, the professions and the civil service were aimed. Religious variations mirrored class position without independent effects on mobility. Despite a positive business contribution, mobility from the sons of manual workers was extremely low. Availability of capital was a key, not only for elite entry through business, but also for the formal education that determined access to the professions