Contractibility and Asset Ownership: On-Board Computers and Governance in U. S. Trucking

We investigate how contractual incompleteness affects asset ownership in trucking by examining cross-sectional patterns in truck ownership and how truck ownership has changed with the diffusion of on-board computers (OBCs). We find that driver ownership of trucks is greater for long than short hauls...

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Bibliographic Details
Published in:The Quarterly journal of economics 2004-11, Vol.119 (4), p.1443-1479
Main Authors: Baker, George P., Hubbard, Thomas N.
Format: Article
Language:English
Subjects:
Business structures
Empirical evidence
Fuel efficiency
Point estimators
Small business owners
Trailers
Truck drivers
Trucking
Trucking industry
Vehicle fleets
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Summary:We investigate how contractual incompleteness affects asset ownership in trucking by examining cross-sectional patterns in truck ownership and how truck ownership has changed with the diffusion of on-board computers (OBCs). We find that driver ownership of trucks is greater for long than short hauls, and when hauls require equipment for which demands are unidirectional rather than bidirectional. We then find that driver ownership decreases with OBC adoption, particularly for longer hauls. These results are consistent with the hypothesis that truck ownership reflects trade-offs between driving incentives and bargaining costs, and indicate that improvements in the contracting environment have led to less independent contracting and larger firms.
ISSN:0033-5533
1531-4650
DOI:10.1162/0033553042476152