The Great Merger Movement and the Diffusion of Electric Power Utilization in American Manufacturing, 1899-1909: A Simple Test of the Schumpeterian Hypothesis

The great merger movement at the turn of the century significantly increased the concentration of many American manufacturing industries. It occurred just as many of them were beginning to electrify their production processes. The conjunction of these two events suggests a simple test of Schumpeter's hypothesis that a high degree of industry concentration is conducive to rapid technological innovation. This paper uses a sample of industries from the Twelfth and Thirteenth Censuses of Manufactures to test whether the great merger movement accelerated the electrification process in American manufacturing industries. The results offer some tentative support for the Schumpeterian hypothesis.