Determinants of Organizational Form: Transaction Costs and Institutions in the European Trucking Industry

Industrial and Corporate Change, 2004, 13(6), 867-82

31 Pages Posted: 12 Jul 2004 Last revised: 22 Jul 2018

See all articles by Benito Arruñada

Benito Arruñada

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

Manuel González Díaz

Universidad de Oviedo - Facultad de Economicas

Alberto Fernández

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Abstract

We explain why European trucking carriers are much smaller and rely more heavily on owner-operators (as opposed to employee drivers) than their US counterparts. Our analysis begins by ruling out differences in technology as the source of those disparities and confirms that standard hypotheses in organizational economics, which have been shown to explain the choice of organizational form in US industry, also apply in Europe. We then argue that the preference for subcontracting over vertical integration in Europe is the result of European institutions - particularly, labor regulation and tax laws - that increase the costs of vertical integration.

Keywords: Transaction costs, governance, hybrids, transportation

JEL Classification: D23, L14, L22, L92

Suggested Citation

Arruñada, Benito and González Díaz, Manuel and Fernández Alonso, Alberto, Determinants of Organizational Form: Transaction Costs and Institutions in the European Trucking Industry. Industrial and Corporate Change, 2004, 13(6), 867-82. Available at SSRN: https://ssrn.com/abstract=563857 or http://dx.doi.org/10.2139/ssrn.563857

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

Alberto Fernández Alonso

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

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain

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