INDUSTRY COSTS AND CONSOLIDATION: EFFICIENCY GAINS AND MERGERS IN THE RAILROAD INDUSTRY

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, the authors focus on efficiency gains. They develop and estimate a model of costs that allows for the estimation of merger specific cost savings and well as industry cost savings. The results suggest that early mergers gave very small effects, but recent "mega" mergers have given very large effects. Their central result is that consolidation in the railroad industry from 1983-1997 accounts for about a 17% reduction in industry costs.

  • Record URL:
  • Corporate Authors:

    University of Oregon, Eugene

    Transport and Logistics Research Center
    Eugene, OR  United States  97403

    Upper Great Plains Transportation Institute

    North Dakota State University
    1320 Albrecht Blvd
    Fargo, ND  United States  58105
  • Authors:
    • Wilson, W W
    • Bitzan, John
  • Publication Date: 2003-6

Language

  • English

Media Info

  • Features: Appendices; References; Tables;
  • Pagination: 53 p.

Subject/Index Terms

Filing Info

  • Accession Number: 00960460
  • Record Type: Publication
  • Report/Paper Numbers: MPC Report No. 03-145
  • Files: UTC, NTL, TRIS
  • Created Date: Jul 18 2003 12:00AM