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Industrial Investment Decisions: A Comparative Analysis*

Published online by Cambridge University Press:  03 February 2011

Henry G. Aubrey
Henry G. Aubrey
Affiliation:
Federal Reserve Bank of New York
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Extract

In Presenting this paper to an audience of historians I find myself in a painfully ambiguous position. I am not qualified to talk to you as a historian; therefore what I am going to say will lack the richness of empirical detail that usually characterizes historical papers. On the other hand, in order to qualify as “comparative analysis” this paper ought to have a firm theoretical foundation for its analysis, and accepted standards of reference for its comparisons. Unfortunately, the development economists are still at the beginning of their difficult attempts to isolate the factors that make for economic development, and the complex interaction of these factors has so far eluded systematic analysis and presentation.

Type
Articles
Information
The Journal of Economic History , Volume 15 , Issue 4 , December 1955 , pp. 335 - 351
Copyright
Copyright © The Economic History Association 1955

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References

1 See also Singer, H. W., “Obstacles to Economic Development,” Social Research, XX (Spring 1953). PP. 19ff.Google Scholar

2 In underdeveloped countries, moreover, the imitation and adaptation of foreign techniques is, in a way, also a pioneering step, as daring as innovation under more advanced conditions.

3 “Investment Decisions in Underdeveloped Countries,” in Capital Formation and Economic Growth, a conference volume of the National Bureau of Economic Research (Princeton, 1955)Google Scholar . Since that paper was drafted there appeared an article on the subject by Shubik, Martin: “Information, Risk, Ignorance and Indeterminacy,” Quarterly Journal of Economics, LXVIII (11 1954)Google Scholar . See also Keirstead, B. S., An Essay in the Theory of Profits and Income Distribution (Oxford, 1953)Google Scholar , and Easterbrook, W. T., “Uncertainty and Economic Change,” The Journal of Economic History, XIV, No. 4 (1954), 346–60CrossRefGoogle Scholar.

4 This corresponds to Schumpeter's “adaptive innovation.”

5 See, for instance, the experience in establishing the first closed-end investment company i Venezuela when 1,400 stockholders nearly doubled the initial subscription goal.—Bottom, RobertJournal of Commerce, 06 17, 1955.Google Scholar

6 Gadgil, D. R., Notes on the Rise of Business Communities in India, Institute of Pacific Relations, 04 1951 (mimeographed)Google Scholar ; Lamb, Helen B., “The Indian Business Communities and the Evolution of an Industrialist Class,” Pacific Affairs, XXVIII (06 1955)Google Scholar , and “Development of Modern Business Communities in India,” in Labor, Management and Economic Growth, Proceedings of a Conference on Human Resources and Labor Relations in Underdeveloped Countries, Ithaca, 1954 (mimeographed)Google Scholar . General sources consulted include Buchanan, D. H., The Development of Capitalistic Enterprise in India (New York: The Macmillan Co., 1934)Google Scholar , and Rutnagar, S. M., Bombay Industries: The Cotton Mills (Bombay, 1927)Google Scholar . I am indebted to George B. Baldwin and Andrew Brimmer for letting me read several unpublished papers prepared by them at the Center for International Studies, Massachusetts Institute of Technology; to Morris D. Morris of the University of Washington for material on India prepared by him; and to Robert I. Crane for the loan of several papers prepared under his supervision at the University of Chicago. I am grateful to Mr. I. Khurshid, Librarian of the Planning Board, Government of Pakistan, for valuable information and stimulation.

7 This is also true for the Marwaris who originated in Rajputana (now Rajasthan), the desert region west of Bombay, whence their activities spread not only west but also east to Calcutta where they became prominent in trade and banking, later also in industry.

8 See also Hoselitz, Bert F., “Entrepreneurship and Economic Growth,” American Journal of Economics and Sociology, XII (10 1952), p. 99.Google Scholar

9 See Issawi, Charles, The Entrepreneur Class in the Middle East, paper prepared for the Conference on the Near East of the Social Science Research Council, 1952 (mimeographed)Google Scholar; Wythe, Georjic, Industry in Latin America (New York, 1949), passimGoogle Scholar.

10 See El-Gritly, A. A. I., “The Structure of Modern Industry in Egypt,” L'Egypte Contemporaine, 1947, pp. 374ft.Google Scholar

11 See, among others, Aubrey, Henry G., “Deliberate Industrialization,” Social Research, 06 1949, pp. 180ff.Google Scholar

12 See Mendershausen, H., “The Pattern of Overseas Economic Development in World War II; Its Significance for the Present,” Economia Internazionale, 08 1951, pp. 10ff.Google Scholar