The rise and fall of an industry: Entry in U.S. copper mining, 1835–1986

The principal forces that led to the rise and fall of the U.S. copper industry are explored: cost-lowering technical change, formation of expectations, consolidation of the industry, and depletion of investment opportunities. I find that the introduction of the steam shovel, which enabled open-pit mining, was the most important technological breakthrough. Revisions of expectations of success were statistically significant but economically less important. Contrary to the conventional wisdom, concentration of ownership encouraged entry. Finally, depletion was primarily responsible for the decline in entry in later years. However, the same forces that led to success also contributed to decline.