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- Title
Cost Effects of Mergers and Deregulation in the U.S. Rail Industry.
- Authors
Berndt, Ernst R.; Friedlaender, Ann F.; Judy Shaw-Er Wang Chiang; Vellturo, Christopher A.
- Abstract
We attempt to disentangle the effects of deregulation on rail costs from those directly attributable to mergers and acquisitions, employing a translog variable cost function, based on an unbalanced panel data set of annual observations for major US. Class I railroads from 1974 to 1986. We find that both deregulation and mergers contributed significantly to cost savings. However, of the accumulated cost savings achieved by the six major firms involved in mergers postderegulation, we estimate that by 1986 about 91 % of the reduction in accumulated costs is due to deregulation, and about 9% is directly due to mergers and acquisitions (which in turn were facilitated by regulatory reforms).
- Subjects
UNITED States; RAILROADS; MERGERS &; acquisitions; DEREGULATION; COST; ECONOMIC policy; COMMUNICATIONS industries
- Publication
Journal of Productivity Analysis, 1993, Vol 4, Issue 1/2, p127
- ISSN
0895-562X
- Publication type
Article
- DOI
10.1007/BF01073470