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The Impact of Information Technology on Motor Carrier Productivity

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  • McMullen, Starr B.

Abstract

This study examines the relationship between motor carrier productivity, marketing strategy, and use of information technology for a sample of U.S. general freight commodity carriers. We use a unique data set containing information on firm marketing strategy and information technology use collected in a survey of Class I and II motor carrier firms (U.S. Department of Transportation, 1999). The measure of productivity used here is the non-parametric Malmquist Index as explained in Grosskopf (1993) and previously applied to general freight motor carriers by McMullen and Okuyama (2000). The Malmquist Index is decomposed into two components: economic efficiency change (EC) and technical efficiency change (TC). A tobit model regression model is used to examine the relationship between firm productivity, marketing strategy, and use of information technology. Information technologies included in the tobit analysis are electronic data interchange (EDI) and satellite communications (SATCOM). We also include firm size, use of owner-operators, and percent unionization as explanatory variables in the tobit regression. Results indicate that use of EDI has a positive and significant impact on economic efficiency (EC). Firms that try to market their product by providing service at the “lowest freight rate” are found to exhibit greater technical efficiency (TC), suggesting that productivity and cost measures that ignore marketing strategy may be biased. Finally, economic efficiency (EC) is found to be significantly greater for firms that are more heavily unionized.

Suggested Citation

  • McMullen, Starr B., 2004. "The Impact of Information Technology on Motor Carrier Productivity," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 43(2).
    • Handle: RePEc:ags:ndjtrf:206728
    DOI: 10.22004/ag.econ.206728
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    References listed on IDEAS

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    1. Fried, Harold O. & Lovell, C. A. Knox & Schmidt, Shelton S. (ed.), 1993. "The Measurement of Productive Efficiency: Techniques and Applications," OUP Catalogue, Oxford University Press, number 9780195072181.
    2. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    3. Erik Brynjolfsson & Lorin M. Hitt, 2000. "Beyond Computation: Information Technology, Organizational Transformation and Business Performance," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 23-48, Fall.
    4. Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "The Economic Theory of Index Numbers and the Measurement of Input, Output, and Productivity," Econometrica, Econometric Society, vol. 50(6), pages 1393-1414, November.
    5. Chakraborty, Atreya & Kazarosian, Mark, 2001. "Marketing strategy and the use of information technology: New evidence from the trucking industry," Research in Transportation Economics, Elsevier, vol. 6(1), pages 71-96, January.
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    Cited by:

    1. Scheraga, Carl A., 2009. "The Relationship between Competitive Strategy Choice and the Components of Firm Efficiency in the General Freight Segment of the Motor Carrier Industry," 50th Annual Transportation Research Forum, Portland, Oregon, March 16-18, 2009 207602, Transportation Research Forum.

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