Nuvolari on Galambos, Hikino and Zamagni, eds., _The Global Chemical Industry in the Age of the Petrochemical Revolution_

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Published by EH.NET (August 2007)

Louis Galambos, Takashi Hikino and Vera Zamagni, editors, _The Global 
Chemical Industry in the Age of the Petrochemical Revolution_. 
Cambridge: Cambridge University Press, 2006. x + 529 pp. $80 
(hardback), ISBN: 0-521-87105-0.

Reviewed for EH.NET by Alessandro Nuvolari, Faculty of Technology 
Management, Eindhoven University of Technology.


This book edited by Louis Galambos (professor of history at John 
Hopkins University, Baltimore), Takashi Hikino (associate professor 
of industrial organization at Kyoto University) and Vera Zamagni 
(professor of economic history at the University of Bologna) contains 
fourteen papers (plus a "quantitative" appendix) on the evolution of 
the global chemical industry from the end of World War II until the 
most recent period. The editors have entrusted the drafting of the 
various chapters to an authoritative panel of scholars who have 
already provided substantive contributions to the history of the 
chemical industry. Given these premises, the ambition of the book, 
which is stated explicitly in the introduction, is to become a sound 
and comprehensive reference text.

The book is divided in two parts. The first part deals with what the 
editors term as "crosscutting issues" (which are essentially peculiar 
features of the evolution of this industry, analyzed from a "global" 
point of view). In this way, the book covers the themes of firms' 
networks, firms' strategies, corporate financing, and environmental 
regulation. More traditionally, the second part of the book contains 
a series of country studies (covering in total eleven nations or 
groups of nations).

Chapter 1 by Fabrizio Cesaroni, Alfonso Gambardella and Myriam 
Mariani focuses on the changing role of networks in the evolution of 
the industry. While before the 1950s, national and international 
collusive networks between firms played an important role in shaping 
the structure of the industry, the authors document the formation and 
growing importance of other forms of networks after World War II, in 
particular those between firms and universities (for accessing newly 
produced scientific knowledge) and between users and producers (in 
particular with users of plastics and other new materials). The 
chapter also documents the emergence of small specialized engineering 
firms (SEFs) that increasingly took care of the design of 
petrochemical plants leading to the formation of an international 
market for technology. The argument of the authors is that the 
competitive success of chemical companies is tightly related with 
their abilities in entering and exploiting these different networks.

In Chapter 2, Harm Schotter attempts to map the strategies of the 
leading chemical companies over the period 1970 to 2000. The sources 
used in this exercise are annual reports and other related companies 
publications. Schotter is looking for evidence on two dimensions of 
competitive strategies: whether a company is focused more on the 
national or on the global market and whether the product mix supplied 
by the company is more oriented towards commodities or specialties. 
The period studied by Schotter is one of intensive restructuring and 
turbulence and this is reflected in rather drastic changes in the 
strategic orientation of companies. Interestingly enough, there seems 
to be no immediate relationship between strategic positioning along 
the dimensions examined by Schotter and competitive success.

In Chapter 3, Marco Da Rin tackles the issue of finance in the 
chemical industry. Da Rin argues convincingly that given the 
importance of investment in research and development, financing is a 
critical component for achieving and maintaining a competitive edge 
in this sector. Accordingly, Da Rin investigates the relationships 
between different national financial systems and the creation of firm 
capabilities in the industry. Da Rin concludes that, while the U.S. 
financial system was capable of assisting companies in their 
restructuring efforts after the 1970s, the European and Japanese 
systems were instead partially responsible for delaying the efforts 
of firms in adapting to the new and more intense competitive 
environment.

Chapter 4 by Wyn Grant is devoted to environmental regulation. The 
chapter charts the development of environmental regulation affecting 
the chemical industry in the U.S. and Europe and the reactions of 
major chemical companies for adapting to it. Grant's conclusion is 
that, although environmental policy and regulation undoubtedly 
represented a destabilizing force which could severely constrain the 
growth of the industry, chemical companies were able through a number 
of initiatives to create a new interface with government and other 
interest groups which has permitted them to adapt rather successfully 
to the new situation.

The chapters of the first part of the book are all nicely crafted and 
they provide very useful surveys. What I think is missing is a 
chapter devoted to technological change, which appears the leitmotiv 
to which all the book refers. I think that, given the importance of 
this factor, it would have been necessary to have a chapter fully 
devoted to a survey of the technological trends of the sector.

The second part of the book is devoted to national case studies. 
Chapter 5 by Ulrich Wengenroth deals with Germany. Chapter 6 by John 
Keenly Smith covers the United States. Chapter 7 by Margrit Muller is 
devoted to Switzerland. Chapter 8 by Gunnar Nerheim is a survey of 
Nordic countries (Sweden, Norway and Finland). In Chapter 9 Florence 
Charue-Duboc summarizes the French case. Chapter 10 by Wyn Grant is a 
survey of the United Kingdom. Chapter 11 by Takashi Hikino is devoted 
to Japan. In Chapter 12 Vera Zamagni deals with Italy. Finally, in 
Chapter 13 by Nuria Puig analyzes Spain.

All the chapters of the second part of the book are written from a 
business history approach and they provide rich and articulated 
descriptions, focussing in particular on national polices and company 
strategies. What perhaps is missing here is the adoption of a more 
explicit common interpretative framework in which each national study 
could have been scaffolded. In my view, the traditional 
structure-conduct-performance approach would have been particularly 
useful for this purpose. In this way, it would have been easier to 
draw comparisons and generalizations. In fact, Chapter 14 by Vera 
Zamagni and Louis Galambos is precisely devoted to a summary of main 
findings of the case studies but this is a very cursory one (only 3 
pages). The book concludes with a quantitative appendix by Renato 
Giannetti and Valentina Romei which provides a quantitative 
assessment of the economic trends of the industry between the 1950s 
and the 1990s.

Notwithstanding some minor reservations (in particular the lack of 
chapter devoted to technical change), in my view the book represents 
a very useful point of reference for anyone (not only economic 
historians, but also economists and management scholars) with an 
interest in this industry.


Alessandro Nuvolari is Assistant Professor in the Economics of 
Science and Technology at Eindhoven University of Technology, the 
Netherlands. His research focuses on the role of innovation and 
technical change in the British industrial revolution. His 
publications include "Collective Invention during the British 
Industrial Revolution: The Case of the Cornish Pumping Engine," 
_Cambridge Journal of Economics_, 2004 and "The Pitfalls of 
Prosopography: Inventors in the _Dictionary of National Biography_" 
_Technology and Culture_, 2006 (joint with Christine MacLeod). He is 
currently working on a book on the development and diffusion of the 
steam engine.

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