• Corpus ID: 168156893

Determinants of Railroad Capital Structure, 1830-1885

  title={Determinants of Railroad Capital Structure, 1830-1885},
  author={Daniel Schiffman},
U.S. Railroads suffered repeated financial crises in the 19th and 20th Centuries. These crises were caused by a combination of high debt levels and strongly procyclical revenues and profits. Given the inherent instability of profits, why did railroads depend primarily on debt to finance their initial growth? I find that, over 1830-1885, railroads faced significant agency and control problems, which were partially mitigated by the use of debt. Around 1885, new developments reinforced the initial… 
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