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

See all articles by Alberto Fernández

Alberto Fernández

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Benito Arruñada

Pompeu Fabra University - Department of Economics and Business; Barcelona GSE

Manuel González Díaz

Universidad de Oviedo - Facultad de Economicas

Abstract

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

Fernández Alonso, Alberto and Arruñada, Benito and González Díaz, Manuel, 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. Available at SSRN: https://ssrn.com/abstract=108108 or http://dx.doi.org/10.2139/ssrn.108108

Alberto Fernández Alonso

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain

Benito Arruñada (Contact Author)

Pompeu Fabra University - Department of Economics and Business ( email )

Ramon Trias Fargas 25-27
Department of Economics and Business
Barcelona, 08005
Spain
+34 93 542 25 72 (Phone)
+34 93 542 17 46 (Fax)

HOME PAGE: http://www.econ.upf.edu/~arrunada

Barcelona GSE ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

Manuel González Díaz

Universidad de Oviedo - Facultad de Economicas ( email )

Campus del Cristo, s/n
Oviedo, Asturias 33071
Spain

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