Managerial failure in mid-Victorian Britain?: Corporate expansion during a promotion boom
Author: Gareth Campbell and John Turner
Published in Business History (2015), vol. 57, no. 8, pp. 1248-1276
This article examines the mid-1840s expansion of the British railway network, which was associated with a large deterioration in shareholder value. Using a counterfactual approach and new data on railway competition, we argue that the expansion of the railway companies, and their subsequent decline in financial performance, was not due to managerial failure. Rather, the promotion of new routes by established railways and mergers with other companies was part of a managerial strategy to maintain incumbent positions, and may have been preferable to not expanding whilst their competitors did.
Download Journal Article:
http://www.tandfonline.com/doi/full/10.1080/00076791.2015.1026260
Download Working Paper:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2605675
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Published in Business History (2015), vol. 57, no. 8, pp. 1248-1276
This article examines the mid-1840s expansion of the British railway network, which was associated with a large deterioration in shareholder value. Using a counterfactual approach and new data on railway competition, we argue that the expansion of the railway companies, and their subsequent decline in financial performance, was not due to managerial failure. Rather, the promotion of new routes by established railways and mergers with other companies was part of a managerial strategy to maintain incumbent positions, and may have been preferable to not expanding whilst their competitors did.
Download Journal Article:
http://www.tandfonline.com/doi/full/10.1080/00076791.2015.1026260
Download Working Paper:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2605675
Read Online:
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