US Motor-Carrier Exit: Prevalence and Determinants

Abstract:The purpose of this study is to first determine the current incidence of exit from the United States' motor-carrier industry. Second, we develop and test an econometric model of the determinants of motor-carrier exit. Using recent data derived from the Motor Carrier Management Information System database, we find that motor-carrier exit continues to be quite prevalent. This study also finds that motor-carrier crash rates are positively associated with the likelihood of exit from the industry, while fleet size and number of commodity segments handled by motor carriers are negatively associated with a carrier's likelihood of exit. Study findings also suggest that for-hire carriers are more likely to exit, and carriers handling hazardous materials are less likely to exit from the motor-carrier industry. The article discusses these findings, including managerial and public policy implications.