TY - JOUR
T1 - Shattered rails, ruined credit
T2 - Financial fragility and railroad operations in the great depression
AU - Schiffman, Daniel A.
PY - 2003/9
Y1 - 2003/9
N2 - This article uses a new panel dataset to investigate the relationship between financial fragility and real activity on U.S. railroads during 1929-1940. Leverage had a negative effect on maintenance, within small firms only. Bankruptcy had a positive effect on maintenance and employment, within large firms only. Both leverage and bankruptcy effects were significantly larger during the worst depression years. Had all railroads been bankrupt during 1930-1933, GDP would have increased by 0.2 percent annually, and employment by 0.125 percent annually. Loans by the Reconstruction Finance Corporation had no impact on maintenance or employment.
AB - This article uses a new panel dataset to investigate the relationship between financial fragility and real activity on U.S. railroads during 1929-1940. Leverage had a negative effect on maintenance, within small firms only. Bankruptcy had a positive effect on maintenance and employment, within large firms only. Both leverage and bankruptcy effects were significantly larger during the worst depression years. Had all railroads been bankrupt during 1930-1933, GDP would have increased by 0.2 percent annually, and employment by 0.125 percent annually. Loans by the Reconstruction Finance Corporation had no impact on maintenance or employment.
UR - http://www.scopus.com/inward/record.url?scp=0242666819&partnerID=8YFLogxK
U2 - 10.1017/S0022050703541997
DO - 10.1017/S0022050703541997
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AN - SCOPUS:0242666819
SN - 0022-0507
VL - 63
SP - 802
EP - 825
JO - Journal of Economic History
JF - Journal of Economic History
IS - 3
ER -