Faculty of Economics and Business Administration Publications Database

Patterns of Restructuring The US Class 1 Railroads from 1984 to 2004

McCullough, Gerard
Angulo, Laura Padilla
Volume: 48
Pages: 115 - 135
Month: January
ISSN-Print: 0022-5258
Link External Source: Online Version
Year: 2014

We investigate the restructuring of the US freight railroad industry after its deregulation. An econometric analysis of the joint effects of 'defensive' and 'strategic restructuring' reveals that, unsurprisingly, downsizing of the physical network has affected financial performance positively. Contrary to widely held beliefs, employment reductions by themselves do not explain improved performance, but controlling for interactions of network reductions and labour downsizing with strategic restructuring measures, employment reductions have a strong positive effect. This suggests a positive revision of the Draconian view that the successful restructuring of the US rail industry is mainly the result of workforce reductions.