The telegraphs go in encouraging the development of larger and
more than efficient merchandises is easy to see and understand, though ultimately that
influence was less strong than the opposing influences of the telegraph and
many other(a) factors towards the growth and integration of firms. First of all,
by radically enlarging legal market areas, it simply made possible the
offshoot of efficient, comprehensive markets. In addition, by reducing the ef-
fective cost of communication oer distances, in many cases it favored mar-
kets over integrated firms.
before the telegraph was introduced to the fall in States in 1844, infor-
mation could only travel as fast as people could. Although between 1800 and
1840 improvements in pane had gradually reduced travel times for
human travel, the verbose speed of travel beyond the northeast section of the
United States effectively prohibited the growth of nationwide markets
the telegraph back up the growth and effi-
ciency of markets by reducing communication time and be and that it en-
couraged the growth and vertical integration of firms by forwarding the
emergence of national market areas to absorb local and regional market areas.
The outcome of these opposing forces in a given industry, curiously in cases
involving telegraphic communication, can be explained, to a large(p) extent, by
looking at two characteristics: the asset specificity of the product or process,
and the complexity of the products description. In those industries with non-
specific products and processes and with simple, standardized product de-
scriptions, the telegraph provided the mechanism for efficient coordination
in national markets. Conversely, in industries with exceedingly asset-specific prod-
ucts and/or complex product descriptions, the telegraph facilitated and fa-
vored the growth and practicable integration of firms
Telegraph rates were much higher per word, at $2.05 for the
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