Quasi-Integration in Less-than-Truckload Trucking
Institutions, Contracts and Organizations: Perspectives from New Institutional Economics, Edward Elgar, Cheltenham, Claude Ménard (ed.), pp. 293-312
27 Pages Posted: 31 Jul 2002 Last revised: 22 Jul 2018
This 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.
Note: Previously entitled : Contractual and Regulatory Explanations of Quasi-integration in the Trucking Industry
Keywords: hold-up, hybrids, institutions, moral hazard, vertical integration, trucking industry
JEL Classification: D23, L14, L22, L92
Suggested Citation: Suggested Citation