Industry costs and consolidation : efficiency gains and mergers in the railroad industry

Details

• Creators:
  Wilson, Wesley W. ; Bitzan, John
• Corporate Contributors:
  Upper Great Plains Transportation Institute
• Subject/TRT Terms:
  Consolidations Costs Deregulation Economic Impacts Mergers Railroads Savings
• Resource Type:
  Research Paper
• TRIS Online Accession Number:
  960460
• Corporate Publisher:
  Upper Great Plains Transportation Institute
• NTL Classification:
  NTL-RAIL TRANSPORTATION-Rail Economics and Finance ; AGR-FREIGHT-Railroads ; NTL-ECONOMICS AND FINANCE-ECONOMICS AND FINANCE ; NTL-ECONOMICS AND FINANCE-Economic Impacts ; NTL-ECONOMICS AND FINANCE-Freight Economics and Finance ; NTL-ECONOMICS AND FINANCE-Rail Economics and Finance ; NTL-FREIGHT-Freight Economics and Finance ; NTL-FREIGHT-FREIGHT
• Abstract:
  Partial deregulation of the railroad industry substantially eased regulatory impediments to consolidation. Since partial deregulation, there has been a massive consolidation of firms in the railroad industry, which has been premised on efficiency gains, network rationalization, and service quality. In this paper, we focus on efficiency gains. We develop and estimate a model of costs that allows for the estimation of merger specific cost savings as well as industry cost savings. The results suggest that early mergers gave very small effects, but recent "mega" mergers have given very large effects. Our central result is that consolidation in the railroad industry from 1983-1997 accounts for about a 17 percent reduction in industry costs.
• Format:
  PDF
• Collection(s):
  University Transportation Centers US Transportation Collection
• Main Document Checksum:
  urn:sha256:9d676418ddd8ec7ca6e7c0b777257305fb1ec07fbfafbaced1d983116fc8a202
• Download URL:
  https://rosap.ntl.bts.gov/view/dot/15938/dot_15938_DS1.pdf
• File Type:
  [PDF - 265.08 KB ]