The 1920s technological revolution and the crash of 1929: the role of RCA, DuPont, General Motors, and Union Carbide

Dimitra Papadovasilaki (), Federico Guerrero (), Rattaphon Wuthisatian () and Bhraman Gulati ()
Additional contact information
Dimitra Papadovasilaki: Lake Forest College
Federico Guerrero: University of Nevada
Rattaphon Wuthisatian: Southern Oregon University
Bhraman Gulati: Colorado State University

SN Business & Economics, 2022, vol. 2, issue 5, 1-22

Abstract: Abstract We study the role that RCA, DuPont, General Motors, and Union Carbide played in the 1927–1933 stock market boom and crash episode. We investigate whether a technological displacement took place and if the cycle was characterized by over-trading. The reasons we reexamine this episode is to contribute to the literature in the following ways: (1) The episode is studied using price and volume, daily data at the company level for the first time. (2) The paper introduces a methodological innovation and in contrast to previous literature, identifies technological displacement with the use of qualitative criteria rather than quantitative metrics. We display that the crash of 1929 originated in speculative activity revolving around a few companies that were the most innovative of the time, namely: RCA, DuPont, General Motors, and Union Carbide, and later extended to the rest of the stock market. These companies led the boom that preceded the crash, reinforcing the idea that radical technological innovations responsible for enhancing long-term prosperity can be the same ones that produce large financial cycles.

Keywords: Financial crisis; Great crash; 1929 Stock market crash; Technological displacement (search for similar items in EconPapers)
JEL-codes: N12 N20 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s43546-022-00208-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:snbeco:v:2:y:2022:i:5:d:10.1007_s43546-022-00208-3

Ordering information: This journal article can be ordered from
https://www.springer.com/journal/43546

DOI: 10.1007/s43546-022-00208-3

Access Statistics for this article

SN Business & Economics is currently edited by Gino D'Oca

More articles in SN Business & Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().