Business HistoryCallforPapers: SpecialIssue
Deadline: 31 March 2018
Bank-Industry versus Stock Market-IndustryRelationships: A Business HistoryApproach
DuringtheGolden Ageof the western economies (1950s-1960s) becameclearthateach country hadtofollowitsownwaytoindustrialisation. Forthe full understanding of theseprocesses, therewas a growinginterestforthe use of anhistoricalperspective. In this line of research, thebookthat Alexander Gerschenkron, professor at Harvard University, published in 1962 entitledEconomicBackwardness in HistoricalPerspectivehadmuchimpact. In this seminal book, whichproposedthe concept of the “conditionalconvergence”, Gerschenkronproposedthatfinancialinstitutions (notfinancialmarkets), byacting as “substitutive factor”, play a fundamental role in industrialization, as the German case hadproved.
Gerschenkron’sthesiswaschallengedby Raymond Goldsmith, theauthor ofFinancialStructure and Development(1969), whoproposednottoleavefinancialmarketsout of theanalysis, becausetheywerealsopart of thefinancialsystem and couldcontributetoeconomicdevelopment, understood as somethingbroaderthanindustrialization. Goldsmith’sapproachwasalsoinfluential, althoughGerschenkron’sbookfitbetterwiththespirit ofGolden Agegovernments, whichwerewillingtoputthebanks (bothpublic and private) at theservice of the industrial policies (seeTortella & García-Ruiz 2013, Chapter 8, fortheemblematicSpanish case).
FromtheGerschenkron-Goldsmith debate, a line of researchwasdevelopedbyfocusingonidentifyingthefinancialsystems of countries as eitherbank-orientedormarket-oriented (Bordo & Sylla 1995; Allen & Gale 2000), stressingthedifferencesbetweenthem. Lateron, CarolineFohlin (2007, 2012, 2016) believedthatthiswas a false polemic and gavehistoricalargumentsfor a scepticalview of theissue. Nevertheless, shepresents a new taxonomy, a “rough classification”, of thedifferentfinancialsystemsbasedontheprevalence of differenttype of banks.
At the time, theeconomist Ross Levine and hisassociates (e.g. LevineZervos 1998) wantedtoapproachtheproblemfrom a quantitativeperspective, tryingtoanswer a very simple question: whichsystemcontributesmosttoeconomicdevelopment? LevinemanagedtoinvolvetheWorld Bank in hisresearch and promotedthecreation of the Global FinancialDevelopmentDatabase (Beck, Demirgüç-KuntLevine 2000), whoserecentexploitationisallowing a betterexploration in thelongrun of thecomplexity of therelationshipsproposed in the 1960s byGerschenkron and Goldsmith.
At thebeginning of the 21st century, thederegulation of financialsystemsledtoanapproximationbetweeninstitutions and financialmarketsthatpavedthewaytothebeliefthattheold divide hadbecomeobsolete (Rajan & Zingales 2003). However, thelatestanalysesdetectthepersistence of significantdifferencesbetweennationalfinancialsystems (Gambacorta, Yang & Tsatsaronis 2014).
Itseemsclearthatmuch can be learnedaboutthebank-industry and stock market-industryrelationshipsifthey are addressedfrom a Business Historyperspective, whichuntilnow has beenalmostcompletelyneglected. Forthisreasonitisproposedthelaunching of a specialissue ofBusiness History, basedon a CallforPapers, aimingtoobtainfresharticlesthataddresstheclassicalissuesonthesubjectwith a new Business Historyapproach:
- Evidence of theadvantages of thebank-industryrelationshipoverthe stock market-industryrelationshipor vice versa;
- Thebanking-industryrelationship in thenetworks of largenationalbanks and thenetworks of small local banks (Vasta et al. 2017);
- Persistence of thedifferencesbetweenfinancialsystemsbasedonVarieties of Capitalism (VoC) and/orLawFinance (commonlaw versus civil lawcountries) approaches;
- Access tofinancebybusinesssize: large, medium and smallcompaniesfacingmarkets and financialinstitutions;
- The role of managers in fosteringthe stock market performance of thefirms;
- Thebestwaytoinnovate: isthe stock marketthemostappropriatewaytofinance and promotetheinnovativecapabilities of thefirm?;
- Theproblem of “financialisation”: toomuchmoney in theeconomybreaksthedirectrelationshipbetweenfinancing and economicdevelopment as proposed (LawSing, 2014)?
Submissioninstructions
Thisspecialissuewelcomescontributionsonthehistory of thebank-industry and stock market-industryrelationships, especiallyifthey use interdisciplinary and new methodologies and cross-country comparisons.
Articlesshould be basedon original research and shouldnot be underconsiderationbyotherjournal. Allarticlesshould be submittedby 31 March 2018 viaScholarOne ( utm_source=CPB&utm_medium=cms&utm_campaign=JMO03712) ,usingthedropdowntoselectsubmissiontotheSpecialIssueonBank-Industry versus Stock Market-IndustryRelationships: A Business HistoryApproach. Allthearticleswill be peer reviewed and, therefore, somemay be rejected. Authorsshouldensurethattheirmanuscriptscomplywiththe Business Historyformattingstandards, which can be foundonthe 'InstructionsforAuthors' ( page. Authorswho are not English nativespeakers are responsibleforhaving a native English-speakingcopyeditorcheck and correcttheirtextsbefore final acceptance.
ThearticlesinitiallyselectedfortheSpecialIssuewill be presented in a workshopthatwilltake place in Madrid in June 2018, sponsoredbyavailablepublicfunds. The final version of thepapersshould be theresult of thisworkshop.
References
Allen, F. & Gale, D. (2000),ComparingFinancialSystems, Cambridge (Mass.), MIT Press.
Beck, T., Demirgüç-Kunt, A. & Levine, R. (2000), “A New DatabaseonFinancialDevelopment and Structure,”World Bank EconomicReview, 14, 597-605.
Bordo, M. & Sylla, R. (eds) (1995),Anglo-American FinancialSystems: Institutions and Markets in theTwentieth Century, New York, Irwin.
Fohlin, C. (2007),FinanceCapitalism and Germany’sRiseto Industrial Power, Cambridge & New York, Cambridge UniversityPress.
Fohlin, C. (2012),Mobilizing Money: HowtheWorld’sRichestNationsFinanced Industrial Growth, Cambridge & New York, Cambridge UniversityPress.
Fohlin, C. (2016), “FinancialSystems and EconomicDevelopment in HistoricalPerspective,” in C. Diebolt & M. Haupert (eds),TheHandbook of Cliometrics, Berlin, SpringerVerlag, 393-430.
Gambacorta, L., Yang, J. & Tsatsaronis, K. (2014), “FinancialStructure and Growth,”BIS QuarterlyReview, March, 21-35.
Gerschenkron, A. (1962),EconomicBackwardness in HistoricalPerspective: A Book of Essays, Cambridge (Mass.), TheBelknapPress of Harvard UniversityPress.
Goldsmith, R.W. (1969),FinancialStructure and Development, New Haven, Yale University.
Law, S.H. & Singh, N. (2014), “DoesTooMuchFinanceHarmEconomicGrowth?,”Journal of Banking and Finance, 41, 36-44.
Levine, R. & Zervos, S. (1998), “Stock Markets, Banks and EconomicGrowth,”American EconomicReview, 88, 537-558.
Rajan, R. & Zingales, L. (2003),Banks and Markets: TheChangingCharacter of EuropeanFinance, Cambridge (Mass.), NBER WorkingPaper 9595.
Tortella, G. & García-Ruiz, J.L. (2013),Spanish Money and Banking. A History, Basingstoke & New York, PalgraveMacmillan.
Vasta, M., Drago, C., Ricciuti, R. & Rinaldi, A. (2017), “Reassessingthe Bank-IndustryRelationship in Italy, 1913-1936: A CounterfactualAnalysis,”Cliometrica, 11, 183-216.
Editorial information
Guest Editor: José L. García-Ruiz,Complutense University of Madrid, Spain ()
Guest Editor: Michelangelo Vasta,University of Siena, Italy ()