ECON 2200 Lecture Notes - Lecture 11: Sherman Antitrust Act, Clayton Antitrust Act, Investment Banking
16 Dec 2016
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Growth of corporations: recall (econ 2106) the economic benefits of corporate form of business organization: Limited liability, unlimited life: number of corporations. By modern standards most factories were small, even in early 20th century: Throughout the reunification era, new corporations emerged and existing corporations grew: number of employees rose, complexity of operations increased (mechanization & mass production, owners were less involved in day-to-day operations; increased use of paid, professional managers. Falling transport costs -> national markets -> firms grew to serve expanding markets. Urbanization concentration of: 1) workers to provide labor for manufacturing) 2) buyers who are heavily dependent on manufactured goods. Also better communication mechanisms to support marketing efforts. Development of formal financial markets: growth of commercial banks, emergence & growth of investment banking assisted (manufacturing) firms with finding investors/shareholders and gaining access to the financial capital necessary for growth. Sherman act (1890) and the clayton act (1914)
