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Were British railway companies well-managed in the early twentieth century?

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  • Crafts, Nicholas
  • Leunig, Tim
  • Mulatu, Abay

Abstract

This is a revised version of a previous working paper, of the same name, which incorporates corrections to errors in our estimates of TFP growth. This paper examines major privately-owned British railway companies before World War I. Quantitative evidence is presented on return on capital employed, total factor productivity growth, cost inefficiency, and speed of passenger services. There were discrepancies in performance across companies but ROCE and TFP typically fell during our period. Cost inefficiency rose before 1900 but then was brought under control as a profits collapse loomed. Without the discipline of either strong competition or effective regulation, managerial failure was common. This sector is an important qualification to the conventional wisdom that late-Victorian Britain did not fail.

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  • Crafts, Nicholas & Leunig, Tim & Mulatu, Abay, 2010. "Were British railway companies well-managed in the early twentieth century?," Economic History Working Papers 27889, London School of Economics and Political Science, Department of Economic History.
    • Handle: RePEc:ehl:wpaper:27889
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    Cited by:

    1. Brian Mitchell & David Chambers & Nick Crafts, 2011. "How good was the profitability of British railways, 1870–1912?," Economic History Review, Economic History Society, vol. 64(3), pages 798-831, August.
    2. Campbell, Gareth, 2012. "Myopic rationality in a Mania," Explorations in Economic History, Elsevier, vol. 49(1), pages 75-91.
    3. Bogart, Dan & You, Xuesheng & Alvarez-Palau, Eduard J. & Satchell, Max & Shaw-Taylor, Leigh, 2022. "Railways, divergence, and structural change in 19th century England and Wales," Journal of Urban Economics, Elsevier, vol. 128(C).
    4. Marchetti, Dalmo & Wanke, Peter F., 2019. "Efficiency in rail transport: Evaluation of the main drivers through meta-analysis with resampling," Transportation Research Part A: Policy and Practice, Elsevier, vol. 120(C), pages 83-100.
    5. Nicholas Crafts & Timothy Leunig & Abay Mulatu, 2011. "Corrigendum: Were British railway companies well managed in the early twentieth century?," Economic History Review, Economic History Society, vol. 64(1), pages 351-356, February.
    6. Crafts, Nicholas, 2012. "British relative economic decline revisited: The role of competition," Explorations in Economic History, Elsevier, vol. 49(1), pages 17-29.
    7. Crafts, Nicholas, 2011. "British Relative Economic Decline Revisited," CAGE Online Working Paper Series 42, Competitive Advantage in the Global Economy (CAGE).
    8. Mark Casson, 2014. "Government failures in railway public policy: the British case," Chapters, in: Francesco Forte & Ram Mudambi & Pietro Maria Navarra (ed.), A Handbook of Alternative Theories of Public Economics, chapter 16, pages 368-399, Edward Elgar Publishing.
    9. Bogart, Dan, 2010. "A global perspective on railway inefficiency and the rise of state ownership, 1880-1912," Explorations in Economic History, Elsevier, vol. 47(2), pages 158-178, April.
    10. Marchetti, Dalmo & Wanke, Peter, 2017. "Brazil's rail freight transport: Efficiency analysis using two-stage DEA and cluster-driven public policies," Socio-Economic Planning Sciences, Elsevier, vol. 59(C), pages 26-42.
    11. Turner, John D., 2024. "Three centuries of corporate governance in the UK," QUCEH Working Paper Series 24-01, Queen's University Belfast, Queen's University Centre for Economic History.

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    More about this item

    JEL classification:

    • N73 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: Pre-1913
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation

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