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How good was the profitability of British Railways, 1870-1912?
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Mitchell, B. R. (Brian R.), Chambers, D. (David) and Crafts, N. F. R. (2009) How good was the profitability of British Railways, 1870-1912? Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.859).
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Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...
Abstract
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.
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Subjects: | T Technology > TF Railroad engineering and operation H Social Sciences > HE Transportation and Communications |
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Divisions: | Faculty of Social Sciences > Economics | ||||
Library of Congress Subject Headings (LCSH): | British Railways, Railroads -- Great Britain, Railroads -- Fares -- Great Britain, Great Britain -- Economic conditions -- 19th century | ||||
Series Name: | Warwick economic research papers | ||||
Publisher: | University of Warwick, Department of Economics | ||||
Place of Publication: | Coventry | ||||
Official Date: | January 2009 | ||||
Dates: |
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Number: | No.859 | ||||
Number of Pages: | 45 | ||||
Institution: | University of Warwick | ||||
Status: | Not Peer Reviewed | ||||
Access rights to Published version: | Open Access (Creative Commons) | ||||
Description: | Originally published June 2008, this version updated January 2009. |
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Version or Related Resource: | Mitchell, B., Chambers, D. and Crafts, N. F. R. (2011). How good was the profitability of British Railways, 1870-1912?. Economic History Review, 64(3), pp. 798-831. | ||||
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