Quasi-integration in less-than-truckload trucking
AbstractThis work studies the organization of less-than-truckload trucking from a contractual point of view. We show that the huge number of owner-operators working in the industry hides a much less fragmented reality. Most of those owner-operators are “quasi-integrated” in higher organizational structures. This hybrid form is generally more efficient than vertical integration because, in the Spanish institutional environment, it lessens serious moral hazard problems, related mainly to the use of the vehicles, and makes it possible to reach economies of scale and density. Empirical evidence suggests that what leads organizations to vertically integrate is not the presence of such economies but hold-up problems, related to the existence of specific assets. Finally, an international comparison hints that institutional constraints are able to explain differences in the evolution of vertical integration across countries.
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Bibliographic InfoPaper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 292.
Date of creation: Jun 1998
Date of revision: Jul 2002
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Web page: http://www.econ.upf.edu/
Hold-up; hybrids; institutions; moral hazard; vertical integration; trucking industry;
Find related papers by JEL classification:
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
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