Deregulation, Mergers, and Cost Savings in Class I U.S. Railroads, 1974-86

Vellturo, Christopher A, et al

Journal of Economics & Management Strategy, 1992, vol. 1, issue 2, 339-69

Abstract: In this paper we attempt to disentangle the effects of deregulation on rail costs from those directly attributable to mergers. We estimate that cost reductions obtained from mergers ranged from a high of 33 percent for the Burlington Northern to a low of a 3 percent cost increase for the CSX. However, firms not engaged in significant merger activities experienced similar cost differentials indicating that consolidation was not a prerequisite for cost savings. We conclude that although mergers did confer some benefits on the participating firms, they were not a prerequisite for railroads being able to achieve substantial cost savings. Coauthors are Ernst R. Berndt, Ann F. Friedlaender, Judy Shaw-Er Wang Chiang, and Mark H. Showalter. Copyright 1992 by MIT Press.

Date: 1992
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jemstr:v:1:y:1992:i:2:p:339-69

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