Determinants of asset ownership: Some evidence from the US trucking industryThe International Journal of Finance (2007)
This study empirically investigates the factors that affect a firm's asset ownership decisions - specifically buying vs. contracting out. Using a unique data on the US trucking industry, it is found that the use of sophisticated monitoring technologies provides firms with coordination and performance measurement tools and reduces the likelihood of the use of owner operators. Similarly, the less-than-trackload (LTL) segment of the industry and specialized assets result in vertical integration. On the other hand, contracting to owner operators is more likely for longer and time-sensitive hauls. Finally, firm size and profitability are negatively related to the choice of owner operators while fmancial leverage does not seem to have any impact on this choice. My results indicate that the predominance of company drivers in the trucking industry is a market response to the institutional set up of the trucking industry and can be explained by both the transaction costs and agency costs theories.
- Asset ownership,
- Trucking industry
Citation InformationShahbaz A Sheikh. "Determinants of asset ownership: Some evidence from the US trucking industry" The International Journal of Finance Vol. 19 Iss. 1 (2007)
Available at: http://works.bepress.com/shahbaz_sheikh/5/