Bring Out the Bulls: Employment Dynamics of Incumbent Trucking Firms During Highly Expansive Market Conditions

ABSTRACT

Studying employment dynamics (e.g., the rates at which firms add or shed jobs) of trucking firms is critical to inform theory and public policy. We examine incumbent trucking firm employment dynamics during the highly expansive period of March 2020–March 2021, when the COVID‐19 pandemic delivered an exogenous shock, upending established freight networks and sharply increasing freight rates and, consequently, carrier profitability. We extend the supply chain management literature on motor carrier growth and Penrose's theory of the growth of the firm (TGF), focusing on the mechanisms most likely to be involved. We test our hypothesized predictions using archival panel data from the Census Bureau for the population of trucking firms with at least one employee. Fitting mixed effects models, we find dynamics from March 2020 to March 2021 differed from prior periods, particularly in that younger firms show higher job gain rates and lower job loss rates than older firms, corroborating our hypothesized predictions. Our theory and findings extend TGF so it better applies to the for‐hire trucking industry that features many small enterprises.