How do trucking companies respond to announced versus unannounced safety crackdowns? The case of government inspection blitzes

Abstract

AbstractEnsuring motor carriers comply with safety rules is critical to the efficient workings of supply chains and the safety of the motoring public. However, little is understood regarding how carriers respond to changes in the likelihood of inspection (a.k.a., “crackdowns”) undertaken by the Department of Transportation. Drawing on the regulatory compliance and criminology literature, we extend the rational cheater explanation that undergirds carrier safety research by incorporating principles from attention‐based theory to devise new theoretical predictions regarding how carriers respond to announced versus unannounced inspection crackdowns. To test our theory, we rely on exogenous variation in the probability of inspection from the DOT's use of announced and unannounced inspection “blitzes.” We test predictions using a longitudinal dataset of nearly 10 million truck inspections from 2012 to 2016. We find firms with lower costs of compliance, and higher costs of avoiding inspections improve compliance prior to and during announced blitzes. Small firms with lower costs of avoidance tend to avoid announced blitzes. Unannounced blitzes result in no changes in compliance or avoidance, providing evidence that awareness is driving our results.