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Economies of Scale in Tobacco Manufacture, 1897–1910

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  • Burns, Malcolm R.

Abstract

The survivor technique is applied to a virtually complete set of plant and output data to determine the extent of scale economies in the plug, smoking, snuff, and fine-cut branches of the tobacco industry between 1897 and 1910. The data indicate that the relative cost advantage of large tobacco factories was substantial, with facilities of minimum efficient size often requiring market shares approaching 10 per cent of U. S. output. These results support one of the principal themes of The Visible Hand—that the realization of scale economies motivated the consolidation movement in American manufacturing at the turn of the century.

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  • Burns, Malcolm R., 1983. "Economies of Scale in Tobacco Manufacture, 1897–1910," The Journal of Economic History, Cambridge University Press, vol. 43(2), pages 461-474, June.
    • Handle: RePEc:cup:jechis:v:43:y:1983:i:02:p:461-474_02
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    Cited by:

    1. Eric W. Zitzewitz, 2003. "Competition and Long–run Productivity Growth in the UK and US Tobacco Industries, 1879–1939," Journal of Industrial Economics, Wiley Blackwell, vol. 51(1), pages 1-33, March.

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