Financial aspects of motor carrier safety inspection performance

This paper investigates the empirical relationships between the safety performances and the financial conditions and management forms of a group of motor carriers. Unlike previous work, we utilize cash flow analyses and random, comprehensive roadside safety inspection results to measure financial status and safety performance, respectively, thus avoiding many criticisms of previous studies.Several probit models are specified and estimated by the method of moments technique. The results strongly suggest that firm financial status is an important predictor of firm safety performance, that closely-held firms exhibit substantially different behavior than other firms, that carriers respond to cargo-specific risks, and that some common safety inspection criteria seem to sensibly measure safety.