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ALTERNATIVES FOR RESTRUCTURING THE RAILROADS: END‐TO‐END OR PARALLEL MERGERS?
Author(s) -
LEVIN RICHARD C.,
WEINBERG DANIEL H.
Publication year - 1979
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1979.tb00536.x
Subject(s) - restructuring , market share , end to end principle , industrial organization , business , economics , mergers and acquisitions , finance , computer science , computer security
The U.S. railroad industry has seen considerable merger activity over the past two decades and more mergers are expected in the near future, but little is presently known about the relative social benefits of alternative merger configurations. Using traffic data for origin‐destination pairs affected by recent mergers, this paper examines the impact of end‐to‐end and parallel mergers on increases in the market share of merged firms. To the extent that increases in market share reflect social benefits in the form of improved service and lower costs, end‐to‐end mergers are found to outperform parallel mergers.