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This paper analyzes how IT adoption affects differently on the shippers` make-buy decision, depending on the changes through agency and coordination problems. Empirical findings are consistent with the theoretical predictions on the changes of shippers` decision, summarized as follows. First, while the adoption of agency-cost reducing IT leads to the increase in the proportion of private fleets, the adoption of coordination-cost reducing IT leads to the increase in proportion of for-hire carriage. Second, the extent of private fleets changes depends on the primary product type that trucks load, with products of important service task experiencing more increase. Third, the extent of for-hire carriage changes depends on the truck`s trip distance, with long-trip trucks experiencing more increase. With the results, we present different policy implications from the conventionally advocated ones.

Shipper's Decision on Private Fleet or For-hire Carriage : IT Adoption, Changes in Incentive Structure and Policy Implications