In the above equation, PFTi is net income (in million) of firms i and is a measure of
performance. The variable CTRi is a four-firm revenue concentration ratio by region and is a
measure of market structure. The variable MKSi is the percentage revenue market share of firm i
and is a measure of firm efficiency. The variable CAEi represents cash and equivalents and is a
measure of how much cash and working capital are available to the carrier for short-term
obligations. The variable CARi is capital to asset ratio and DERi is debt to equity ratio. Both
these variables reflect risk taking by the firm. The variable DRi is a regional dummy variable
that equals 1 if the firm is located in the south, and 0 otherwise. The variable DR1 is commodity
dummy that equals 1 if the firm hauled agricultural commodities, and 0 otherwise. The variable
DR2 is commodity dummy that equals 1 if the firm hauled refrigerated food products, and 0
otherwise. The variable Ui is the error term with a mean of zero and a variance of one.
In the study by Kari et al, 2002, the authors used annual and pooled data for truck carriers
that hauled agricultural commodities during the period 1997-1999. In our analyses, we not only
used the same carrier group but also used a longer time period (1994-2002) to test the two
hypotheses. In testing the two hypotheses for the agricultural commodity carrier group, we also
compared the annual and pooled data results for the periods 1994-1996 and 2000-2002 with the
results obtained by Kari et al (1997-1999) to determine which hypothesis is true. Results of that
study indicated that efficiency is the driving force behind performance of firms in the agricultural
commodity carrier industry. The analysis was expanded to include U. S. trucking industry as a
group and other industry segments particularly the refrigerated food products to test whether the
market structure, market share, and profits were the results of the efficiency or the traditional
structure hypothesis during the 9-year period (1994-2002).