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α: calibrated so average coauthorship-adjusted count equals average raw count
This article examines the role of capital-deepening technical change in promoting the growth of large firms and concentrated markets in the late nineteenth-century United States. Translog production functions allowing nonconstant returns to scale and biased technical change are estimated in pooled cross-section time series for 16 major industries over the period 1850–1890 based on Census data. It is shown that substantial increases in optimal firm size, dictating natural monopoly or tight oligopoly market structures, occurred in some but not all of the industries experiencing substantial increases in concentration over this period. In a number of markets high concentration levels did not appear to have been compelled by changes in technology.