Date of Degree
Elizabeth Field Hendrey
This study concerns the measurement and quantification of the relationship between railroadization in the United States in the mid-19th century and the subsequent evolution of the modern, large-scale, corporate form of industrial business organization marked by significant economies of scale and scope, as described in various writings by Alfred Chandler. Focusing on American industry as it developed from 1850-1880 using data uniquely suited to empirical analysis of economies of scale and scope, its aim is to determine whether the growth of the American railroad network, as Chandler contended, expanded markets and augmented the American financial sector such that the result was a more concentrated, large-scale mode of industrial organization characterized by extensive and increasing economies of scale and scope in sync with the growth of its extensive railroad system.
Apart from some positive results found in the scope analysis of Chapter 6 showing an ascending scope pattern from 1850-1880 in a few key industries, our findings indicate an overall gloomy prognosis for the empirical validity of the Chandler hypothesis. With the cross-country analyses of Chapters 2 and 3 showing no evidence of a greater expansion of the railroad systems of the United States and Germany at mid-century and resultant vastness thereof with respect to Britain circa the 1870's as contributing to a more concentrated industrial sector in those countries, and the mixed evidence in support of a rise in efficient scale in American industry from 1860-1880 as shown in Chapters 4 and 5, not to mention the omnipresent dips at 1870 seen in both the scale and scope estimates, our findings reflect poorly upon Chandler's idea of that date as the benchmark period in which to begin to expect to see the effects of transportation improvements upon scale and scope economies in American industry. Rather, they indicate a far greater impact of the Civil War aftermath shock than Chandler accounted for--perhaps one that persisted on until the 1880's--and suggest a much later date of the full impact of the railroads upon scale and scope of industry than Chandler bargained for--perhaps 1900 as indicated by Atack (1985).
Kalson, Michael, "Railroads and Economies of Scale and Scope in U.S. Manufacturing Industries: 1850-1880. Chandler Revisited" (2010). CUNY Academic Works.