UNITED-STATES STEELS ACQUISITION OF THE GREAT NORTHERN ORE PROPERTIES- VERTICAL FORECLOSURE OR EFFICIENT CONTRACTUAL GOVERNANCE

Authors
MULLIN JC MULLIN WP
Citation
Jc. Mullin et Wp. Mullin, UNITED-STATES STEELS ACQUISITION OF THE GREAT NORTHERN ORE PROPERTIES- VERTICAL FORECLOSURE OR EFFICIENT CONTRACTUAL GOVERNANCE, Journal of law, economics, & organization, 13(1), 1997, pp. 74-100
Citations number
55
Categorie Soggetti
Law,Economics
Journal title
Journal of law, economics, & organization → ACNP
ISSN journal
87566222
Volume
13
Issue
1
Year of publication
1997
Pages
74 - 100
Database
ISI
SICI code
8756-6222(1997)13:1<74:USAOTG>2.0.ZU;2-4
Abstract
This article examines United States Steel Corporation's acquisition by long-term lease of the iron ore properties of the Great Northern Rail way. This 1906 transaction, which significantly increased U.S. Steel's already substantial ore holdings, has been characterized by contempor ary observers and modern economists as an example of vertical foreclos ure. We present qualitative and quantitative evidence to support an al ternative view that the lease generated a net efficiency gain as it pr omoted relationship-specific investment in the exploitation of the ore properties.