How good was the profitability of British railways, 1870–1912?
This paper provides new estimates of the return on capital employed (ROCE) for major British railway companies. It shows that ROCE was generally below the cost of capital after the mid-1870s and fell till the turn of the century. Addressing issues of cost inefficiency could have restored ROCE to an adequate level in the late 1890s but not in 1910. Declines in ROCE hit share prices and returns to shareholders were negative after 1897. Optimal portfolio analysis shows that, whilst railway securities would have had a substantial weight prior to this date, investors would have been justified in rushing to the exits thereafter.
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Volume (Year): 64 (2011)
Issue (Month): 3 (08)
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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"Total factor productivity growth on Britain's railways, 1852-1912: a reappraisal of the evidence,"
Economic History Working Papers
22553, London School of Economics and Political Science, Department of Economic History.
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NBER Working Papers
11266, National Bureau of Economic Research, Inc.
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"Time is money: a re-assessment of the passenger social savings from Victorian British railways,"
Economic History Working Papers
22551, London School of Economics and Political Science, Department of Economic History.
- Leunig, Timothy, 2006. "Time is Money: A Re-Assessment of the Passenger Social Savings from Victorian British Railways," The Journal of Economic History, Cambridge University Press, vol. 66(03), pages 635-673, September.
- McCloskey, Donald N. & Sandberg, Lars G., 1971. "From damnation to redemption: Judgments on the late victorian entrepreneur," Explorations in Economic History, Elsevier, vol. 9(1), pages 89-108.
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