The Impact of Deregulation
on America's Infrastructure
Industries: A "Process Model" with Illustrations from
Banking
Paul
Hirsch, Steven Klinkerman, and Michael Lounsbury
Abstract
How much have critical industries in America changed
since their deregulation during the 1980s and 1990s? This paper
presents a "process model" of the dramatic shifts experienced by
key firms and key industries--from state-supported near-monopolies,
to the lower prices and greater choice offered by new entrants,
to a shakeout period (large mergers, exits) tentatively restoring
the earlier "equilibrium."
This process is reviewed, from the experiences of such deregulated
industries as: airlines, banking, telecommunications, and electrical
utilities, with a more detailed illustration from the banking sector.
We trace (1) the initially high volatility, in both their economic
performance and management capabilities; followed by (2) the arrival
of new entrants (e.g., Southwest Airlines, Nationsbank, CNN, and
Enron); and then, (3) a move towards new equilibria, in which the
earlier stability is now closely approached and more easily re-established.
Paul Hirsch, Department
of Organization Behavior, Kellogg Graduate School of Management,
Northwestern University
Steven Klinkerman, Department of Organization
Behavior, Kellogg Graduate School of Management, Northwestern University
Michael Lounsbury, Department of Organization
Behavior, Kellogg Graduate School of Management, Northwestern University
To Order:
Hard copies of IPR working papers cost $5.00 each (international orders are $10 each). We only accept checks drawn on U.S. bank and payable in U.S. funds. Checks or
money orders should be made payable to Northwestern University and sent to
the following address:
Publications Department - WP Orders
Institute for Policy Research
2040 Sheridan Rd., Evanston, IL 60208-4100.
For information, call 847-491-8712 or email ipr@northwestern.edu.
Please note that we do not accept credit cards.
