investigating factors affecting the adoption of electronic toll

Investigating Factors Affecting the Adoption of Electronic Toll Collection:A Transaction Cost Economics Perspective

Chun-Der Chen Yi-Wen Fan

Cheng-Kiang Farn Department of Information Management

National Central University, Taiwan, R.O.C. {marschen, iwfan, ckfarn}@mgt.ncu.edu.tw

Abstract

In order to reduce the number of vehicles stuck in congestion, especially for stop-and-go traffic at toll plazas, the establishment of electronic toll collection (ETC) system has been a hot issue and dominant trend in many countries. However, despite the potential benefits for motorists, the utilization rate of vehicles has been lower than expected in Taiwan during the introduction stage. Drawing from the transaction cost economics (TCE) perspective, the objective of this study is to advance our understanding in the effects of transaction attributes (uncertainty, asset specificity, and transaction frequency) on the intention of ETC system adoption. Through empirical data collection and analysis from highway motorists who had not installed on-board unit (OBU) for ETC service in Taiwan, we found that uncertainty and asset specificity indeed positively engender motorist’s perceived risk. Moreover, results also reveals that perceived risk negatively influences the intention of ETC system adoption, and transaction frequency positively affects the intention for adopting ETC system. Implications for practitioners and researchers and suggestions for future research are also addressed in this study.

1. Introduction

Due to changing commuting patterns, demographics,

and increased non-work trips during rush hours, heavy

high congestion has become one of the most serious

urban problems for many countries worldwide. In

order to reduce the number of vehicles stuck in

congestion, especially for stop-and-go traffic at toll

plazas, the establishment of electronic toll collection

(ETC) system has been a hot issue and dominant trend

in many countries. ETC is a fairly mature technology

that allows for electronic payment of highway tolls.

Drivers equipped with on-board units (OBU) that

electronically identify vehicles as they pass through a

toll plaza without stopping or even slowing down, with

tolls automatically charged to or debited from

“smartcards” inserted in their OBUs, the removable

credit card-sized electronic purse with stored value

which can be periodically replenished when the

balance is low. ETC not only eliminates the traffic

queue at tollbooths and improves safety for the

motoring public, it also coupled with potential impacts

on personal travel behavior, commercial vehicle

operations, and great electronic commerce

opportunities behind in particular [8].

Deployment of ETC systems continues to expand.

In Taiwan, Far Eastern Electronic Toll Collection Co.

(FETC), the build-operate-transfer project contractor,

was commissioned by the Taiwan Area National

Highway Bureau to install the nation’s first ETC

system in 22 toll plazas along the two North-South

highways, which carry 5 million to 6 million vehicles

per year. After being tested in a variety of conditions,

the construction of ETC was completed by the end of

2005, and officially launched on February 10, 2006.

Furthermore, a satellite-based vehicle positioning

system (VPS) will also be implemented in 2008. The

entire system should be operational by July 2010.

Eventually, the Taiwan authorities envision that all

manual tolls will gradually be replaced.

During the initial stage of the first three months,

however, despite with the potential benefits for

motorists, large-scaled TV commercials, and diverse

promotion activities for ETC system, the utilization

rate of large vehicles (e.g., tourist coach, truck,

container car) is about 20 percents. Most importantly,

the utilization rate of ETC lanes among small vehicles

(e.g., private cars) is only about 6.5 percent by May 6,

2006, showing that the individual use of ETC has been

Proceedings of the 40th Hawaii International Conference on System Sciences - 2007

1©1530-1605/07 $20.00 2007 IEEE

lower than expected (http://www.fetc.net.tw, 2006). In

fact, after the formal launch of the ETC system in

Taiwan, disputes, public complaints, and allegations of

impropriety have been rife, filling with great

uncertainties and undermining people’s confidence in

the system.

The application of ETC system is still in an early

stage, and why motorists choose (or do not choose)

ETC is far from being completely understood.

Knowing possible barriers why people accept or reject

an emerging technology like ETC system has proven

to be a challenging issue. Several fundamental

intention-based theories such as the Theory of

Reasoned Action (TRA) [5], the theory of planned

behavior (TPB), and the technology acceptance model

(TAM) (e.g., [17]) could provide great insights and

implications for understanding an individual’s

intention towards using a system. However,

individuals are predicted to make their choices based

on rationally and calculatively derived costs and

benefits, and it is notable that no past empirical studies

discussed the impact and significant role of transaction

cost on the intention of ETC system adoption.

In addressing these research gaps, the objective of

our study is to uncover the factors related to

transaction attributes affecting the intention of ETC

system adoption from transaction cost economics

(TCE) perspective. Through empirical data collection

and analysis from highway motorists who had not

installed OBUs for ETC service in Taiwan, we hope to

provide some meaningful insights for explaining the

possible obstacles of the intention of ETC system

adoption.

2. Theoretical Framework and Hypotheses

2.1. The transaction cost economics (TCE) perspective

Figure 1 identifies the key constructs and main

relationships examined in the study. As shown,

uncertainty and asset specificity are hypothesized to

affect perceived risk. In additions, perceived risk and

transaction frequency are hypothesized to affect the

intention of ETC system adoption. The following

section elaborates on these relationships and explains

the theoretical underpinning of these hypotheses.

Figure 1. The Proposed Conceptual Model and Research Hypotheses

Before describing our analysis, we first briefly

outline the central tenets of TCE. While there have

been many elaborations and extensions to the theory,

we focus only on the core propositions elaborated by

Williamson [22, 23, 24, 26] regarding the governance

of transactions. TCE explains various problems of

economic organizations [13]. Its basic principle is that

individuals would like to conduct transactions in the

most efficient way [24].

A transaction refers to a process by which a good or

service is transferred across a technologically

separable interface [24]. In the classical economic

theory, it is assumed that information is symmetric in

the market so both buyers and sellers are assumed to

have the same amount of information and the

transaction can be executed without cost [10].

However, using a market for transaction-related

activities is not frictionless. In reality, relying on

markets for transactions involves significant

transaction costs such as searching for information in

finding a reliable trade partners, negotiating contracts

with them, and monitoring the on-going process to

ensure a favorable deal etc. TCE theoretically explains

why a transaction subject (e.g., an individual or a firm)

chooses a particular form of transaction instead of

others.

Two key behavioral assumptions characterize TCE:

bounded rationality and opportunism [13]. Boundedrationality refers to the neurophysiological and

language limits of individuals [14]. When conducting

a transaction, while people might want to act rationally,

they are limited in their ability to receive, store,

retrieve, and communicate information without error.

No matter how knowledgeable they might be, they

cannot consider all the possible alternatives or

conditions of action. Since reaching an optimal

decision may be difficult, TCE views bounded

rationality as a problem under conditions of

uncertainty, thereby occasioning an economic problem


2

or a risk. The second assumption, opportunism, refers

to the possibility that people will act in their own self-

interested way with guile [24]. It assumes that people

may not be entirely honest and truthful about their

intentions. Probability exists that any given actor will

behave opportunistically some of the time to take

advantage of unforeseen circumstances that gives them

the chance to exploit another party in a transaction.

In summary, the combination of these assumptions

results in information asymmetry and uncertainties,

thereby giving rise to great transaction costs. As such,

people tend to “organize transactions so as to

economize on bounded rationality while

simultaneously safeguarding them against the hazards

of opportunism” [24]. That is, the lower the

transaction costs and perceived risks, the more likely

individuals are to conduct the transaction.

2.2. Three key dimensions of TCE and hypotheses development

2.2.1. The effect of uncertainty on perceived risk.Uncertainty, asset specificity, and transaction

frequency form the three key components of TCE that

are used to characterize any transaction. Transactions

can have low or high uncertainty; involve specific or

non-specific assets; or can be rare or frequent.

Uncertainty refers to the unanticipated changes in

circumstances surrounding a transaction. It could

come in various forms. In this study, three kinds of

uncertainty related to the theoretical framework are

examined, namely, environmental uncertainty,

behavioral uncertainty, and performance uncertainty of

ETC system.

First, one form highlighted by Williamson [22] is

parametric or environmental uncertainty. When

unforeseen contingencies arise, transactions are often

influenced by unpredictable factors (e.g., the weather,

political or societal events) and beyond anyone’s

control, thereby increasing transaction costs and risks.

For example, when launching the ETC system on Feb.

10, 2006, the Ministry of Transportation and

Communications (MOTC) also announced that it

would cancel one of the two ETC lanes near toll

collection stations in each direction of both highways,

if the number of vehicles installed with OBUs failed to

reach 100,000 units one month after the

implementation of the new system. In fact, it is

estimated that the number of vehicles already installed

with OBUs has yet to reach 80,000 on March 3, 2006.

As such, many people such like Taiwan’s lawmakers

questioned that “How could FETC complete the

installation of 20,000 OBUs in just two days?” 1

Furthermore, the Taipei High Administrative Court

ruled to revoke the “top priority applicant” status of

the FETC in a screening process that enabled it to win

the contract to operate the ETC system. The ruling had

thrown the controversial ETC project into further

disarray and a series of investigation into an alleged

bribery scandal (China Post Online, 2006). If the

scandals are all proved true and relevant people

indicted and sentenced, the MOTC is likely to suspend

the implementation of the ETC project, thereby

increasing great uncertainties and agitations to

motorists.2

Second, behavioral uncertainty refers to the

difficulty in ascertaining the actual performance of

vendors, or their adherence to contractual agreements

[24]. In case of ETC system in Taiwan, for example,

timely response for the installation and after-sale

service provided by FETC are of great concern to

motorists. However, inconvenient OBU installation

due to insufficient service locations, unreasonable

OBU prices, or vague contractual agreement leads to

the escalation of public complaints. Lastly,

performance uncertainty implies the difficulty in

ascertaining the quality of purchased products [18].

Consumers are likely to wonder if purchased goods

will meet their expectation and whether they will

perform well. Likewise, performance uncertainty

would affect a consumer’s likelihood of buying

product or service.

For example, since the launch of the ETC system

till now, there was still much debate and speculation as

to whether microwave or infrared technology would

work best (note: FTEC selected infrared). According

to the white paper announced by European

Commission [4], current toll collection systems in the

European Union are not interoperable due to

differences in charging concepts, technologies,

classification and tariff structure, and legal and

institutional backgrounds. Anticipating the launch of

Europe’s own GNSS system, Galileo, a 2003 European

Commission directive has decided that all existing

dedicated short range communications (DSRC) (e.g.,

infrared) toll collection systems develop migration

strategies by 2010 and all new toll collection systems

1

The China Post News (2006) , “ETC lanes to be cut if OBU

installations fall below target”, available in

http://www.chinapost.com.tw/archive/detail.asp?cat=1&id=78001,

accessed date: 2006/05/10.2

Taipei Times New (2006), “Solving the ETC crisis will be no easy

matter”, available in

http://www.taipeitimes.com/News/editorials/archives/2006/03/05/20

03295837, accessed date: 2006/05/10.


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must be GNSS/GSM based by 2012. Likewise, it is

questionable whether FETC offers an outdated system

and the OBUs, which use an infrared system, could

still operate when the government adopts VPS in 2008.

Uncertainty coupled with bounded rationality

diminishes the ability of motorists for planning

effectively; therefore, increase the transaction costs

surrounding transaction objects [12]. In each case,

whether people encounter environmental, behavioral,

or performance uncertainties, transactors will perceive

great risks because they are associated with the

negative outcomes, the transaction costs of the

adoption of ETC system. This line of reasoning leads

to the following hypothesis regarding the role

transaction cost plays in determining motorists’

perceived risks:

Hypothesis 1 (H1): The perceived uncertainty of a motorist will positively increase his perceived risk on ETC system.

2.2.2. The effect of asset specificity on perceived risk. The second principal dimension for describing

transactions in TCE is asset specificity. Asset

specificity refers to the degree to which an asset can be

redeployed to alternative uses and by alternative users

without sacrifice of productive value [25, p.142]. The

specific investment linked to transactions has been

considered as the major force behind contractual

arrangements [19]. Specificity exists when one or both

parties to the transaction make investment that

involves design characteristics or unique resources

specific to the transaction. Likewise, this investment

will have a lower value in alternative uses [25], and

highly asset-specific investments (also called

relationship-specific investments) pose potential costs

since they have little or no value outside the exchange

relationship. If one party were to breach the contract,

the value of the relationship-specific investments

would fall. This is the so-called lock-in effect, where

much can be lost to one or both parties if the

relationship dissolves [24].

Two kinds of asset specificity involved in ETC

system adoption are considered in this study. They are

site specificity and physical asset specificity. Site

specificity indicates an asset that becomes committed

to a particular use owing to its location. Physical asset

specificity refers to the degree of customization of the

physical asset for the specific exchange, such like

investment in specific tool and/or machinery.

In case of ETC system in Taiwan, it is not allowed

to implement multiple vehicle registration on one OBU

in the original business contract between MOTC and

FETC. In other words, every vehicle must be

equipped with its own dedicated OBU, thereby

increasing the site (or vehicle for this study) specificity

for motorist. Despite MOTC officials announced that

they will ask FETC to relax restrictions that allow

multiple vehicle registration on one OBU, however,

FETC have said that it may take at least 8 or 9 months

to complete such technical modifications in the system

network. In additions, OBU is not free of charge. The

unit itself costs NT$1,180 (26.90 US$) with batteries

included, and installation costs NT$175 (5.47 US$). A

deposit of NT$200 (6.25 US$) is also required for the

integrated circuit card in the OBU. Furthermore and

surprisingly, under the infrared systems selected by

FETC, cars are only able to pass through a single toll

booth lane. The goal of having “multi-lane free flow”

and charging motorists by the number of kilometers

they drive on the highway setting by MOTC officials

was only possible by using VPS. However, VPS will

be another option for motorists, despite FETC asserted

that “they will not be obliged to switch to a new

system”.

In summary, these conditions imply that motorists

need to invest great site and physical asset specificity

in order to use the ETC service providing by the “state-

of-the-art” technology, thereby confronting significant

lock-in effects and the associated risk factors. Based

on these arguments, the following is consequently

hypothesized:

Hypothesis 2 (H2): The perceived asset specificity of a motorist will positively increase his perceived risk on ETC system.

2.2.3. The effect of perceived risk on the intention of ETC system adoption. In general, it is accepted

that the higher the risk the lower is the likelihood of

transaction. Consumers would be willing to transact if

their risk perceptions were low [1]. Sitkin and

Weingart [15] argued that the higher the perceived risk,

the greater the perceived chance of experiencing a loss,

therefore, the lower the consumer’s expected value

from the transaction. In case of ETC system in Taiwan,

according to the above arguments, when motorists

perceive potential but significant risks under

conditions of high uncertainty and high asset

specificity, their might lower their intention of ETC

system adoption. Thus we hypothesized that:

Hypothesis 3 (H3): The perceived risk of a motorist will negatively influence his adoption of ETC system.


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2.2.4. The effect of transaction frequency on the intention of ETC system adoption. Transaction

frequency concerns the degree to which a particular

exchange between two agents is repeated [19]. In the

case of buyer-supplier relationship in organizational

level, the frequency of the transaction would refer to

how often the exchange occurs; e.g., each day or each

week. In the case of rarely occurring transactions, it

would not pay for the firm to establish a specialized

governance mechanism since it might involve

significant set-up and maintenance costs. And these

costs are likely to be higher than the potential losses

from opportunism and inflexibility [21].

Analogously, motorists who travel less on the

highway systems or rarely pass toll plazas might need

not to invest and install OBUs. However, for heavy

users of the highway systems, especially those who

frequently pass toll plazas, there will be more

convenient and no need for them to slow down or to

carry cash for paying toll by using ETC service. Thus,

we hypothesize that transaction frequency will be

positively related to motorist’s intention of ETC

system adoption and the following hypothesis is set

forth:

Hypothesis 4 (H4): The transaction frequency of a motorist will positively influence his adoption of ETC system.

3. Methodology and Research Design

3.1. Sample and data collection

A self-administered questionnaire was used for our

research purpose. Since this paper was targeted at

individual motorists of private vehicles who had not

installed OBU yet for examining the effects of

transaction attributes and the intention of ETC system

adoption, we employed trained doctoral students as

interviewers to conduct this study. Mall-intercept

personal interviews were administered in several major

rest areas along the Sun Yat-Sen Highway and the

Northern Second Highway in Taiwan since a

probabilistic sampling method could not be applied to

this study. Motorists were first asked whether they had

not installed OBUs for using ETC service. If so, after

briefly elucidating our research purpose, they were

invited to participate and complete the survey

questionnaires. A total of 300 questionnaires were

distributed between March and April 2006, and a total

of 264 completed questionnaires were returned. Since

9 questionnaires were invalid, 255 responses were

obtained and valid (85.00% response rate). As shown

in Table 1, 77.25% are males and majority of

respondents (80.78%) are in the age group of 30-39

and 40-49 years. In additions, most respondents are

highly educated with 86.67% of them attaining at least

diplomas or postgraduate degrees. Moreover, the

frequencies of passing toll plazas show that 41.57% of

our respondents are frequent highway motorists.

Though passing toll plazas quite often (ten times per

day, one time or above per day, and several times per

week), they have still not installed OBUs.

Table 1. Demographic Profile of the Respondents (N=255)

3.2. Measurement scale development

The operationalization, sources, and standardized

loadings of measurement items are shown in Appendix.

To test the framework, we paid particular attention to

issues of operationalization and measurement in this

study, following Venkatraman and Grant [20]. We

operationalized the variables in two ways: (1) for those

variables that have been previously employed in

research setting, we adopted the measures with

acceptable measurement quality; and (2) for those

variables that were unique to our conceptual model, we

developed operational measures, which we assessed

for content validity through discussions with faculties


5

and doctoral students for clarity. Respecting

Nunnally’s [11] recommended procedures, we

developed multiple items for each construct when

possible. The preliminary instrument was pilot tested

and reviewed by faculty and doctoral students for

clarity. All items were five-point, Likert-type scales

anchored at “strongly disagree” (1), “strongly agree”

(5), and “neither agree nor disagree” (3).

For measuring uncertainty, the performance

uncertainty and behavioral uncertainty scales are

adapted from Teo and Yu [18]. The environmental

uncertainty items are based on Teo and Yu [18] and

Wang [21]. The asset specificity scales are adapted

from Wang [21] and Teo and Yu [18]. The perceived

risk items are adapted from Stone and Gronhaug [16].

Finally, as for the intention of ETC system adoption,

we adopt it from Yu et al. [27].

4. Data Analysis and Results

4.1. Convergent validity and discriminant validity

In analyzing the collected data, this study followed

the two-step procedure suggested by Anderson and

Gerbing [2]. We estimated and re-specified the

measurement model prior to incorporating the

structural restrictions. Convergent and discriminant

validity of the remaining items and scales were tested

with confirmatory factory analysis (CFA) using the

LISREL 8.50 program. The result of the CFA

indicated that the measurement model provided a very

good fit to the data: x2(120)=251.56, Bentler Bonett

Normed Fit Index (NFI) = 0.95, Non-Normed Fit

Index (NNFI) = 0.96, Comparative Fit Index (CFI) =

0.97, Goodness-of-Fit Index (GFI) = 0.90, and Root

Mean Square Error of Approximation (RMSEA) =

0.067 (see Appendix). Convergent validity was

assessed based on the criteria that the indicator’s

estimated pattern coefficient was significant on its

posited underlying construct factor. We evaluated for

the measurement scales using the three criteria

suggested by Fornell and Larcker [6]: (a) all indicator

factor loadings ( ) should be significant and exceed

0.7 ; (b) construct reliabilities should exceed 0.8 ; and

(c) average variance extracted (AVE) by each

construct should exceed the variance due to

measurement error for that construct (e.g., AVE should

exceed 0.5).

All values in the CFA model exceeded 0.7 except

one indicator of asset specificity (standardized loading

= 0.64) but were all significant at p=0.001. Composite

reliabilities of constructs ranged from 0.83 to 0.97 (see

Table 2). AVE, ranging form 0.60 to 0.95, was greater

than the variance due to measurement error. Therefore,

all three conditions for convergent validity were met.

Table 2. Reliability, Correlation Coefficients and AVE Results

Finally, discriminant validity was shown when the

square root of each construct’s AVE is larger than its

correlations with other constructs [3]. As illustrated in

Table 2, the square root of the AVE is larger than all

other cross-correlations. Hence the latter test of

discriminant validity was also met. In addition to

reliability coefficients and AVE values, Table 2 also

reports the correlation matrix, means, and standard

deviations of the study’s principal constructs.

4.2. Hypothesis testing

The research model presented earlier was tested

using the structural equation modeling (SEM)

approach. Overall, the goodness-of-fit of the structural

model was comparable to that of the previous CFA

model and provided evidence of adequate fit. With

regard to the specific hypotheses, we found (in Figure

2):

Hypotheses 1 and 2: Our results supported the

hypotheses that both higher uncertainty and

higher asset specificity would have a

significant positive effect on motorists’

perceived risks (t=8.88 and 3.65, p<0.001).

Hypothesis 3: As expected, higher level of

motorists’ perceived risks had a significant

but strong negative effect on the intention of

ETC system adoption (t=-7.02, p<0.001).

Hypothesis 4: As predicted, higher level of

transaction frequency had a significant but

strong positive effect on the intention of ETC

system adoption (t=3.86, p<0.001). We will


6

discuss these findings in details in next

section.

Figure 2. Data Analysis Results

5. Discussions

This study aims to shed light on the obstacles of

motorist’s intention of ETC system adoption by using

the TCE perspective. As illustrated in Figure 2, the

overall explanatory power of our research model was

relatively high; a R-square of 65.00% for perceived

risk and a R-square of 70.00% for the intention of ETC

system adoption were obtained. Uncertainty and asset

specificity were found to be significant in terms of

being related to motorist’s perceived risk, while

perceived risk and transaction frequency were also

found to be significantly related to the intention of

ETC system adoption. Results in this study confirm

our initial argument that transaction attributes have

significant effects on motorist’s willingness to adopt

the ETC system and service.

The positive relationship between uncertainty and

perceived risk (H1) is supported (beta=0.63, p<.001).

Moreover, the positive relationship between asset

specificity and perceived risk (H2) is also supported

(beta=0.24, p<.001). However, the effect of ETC

system uncertainty on motorist’s perceived risk is

stronger than the one of ETC system asset specificity.

It shows that motorists mostly worry about the

uncertainty of ETC service because they could not

foresee whether ETC service might work or continue,

thereby increasing their perceived risks towards ETC

system.

We hypothesized that perceived risk is negatively

related to the intention of ETC system adoption (H3)

and the hypothesized relationship was supported by

empirical data in this study (beta=-0.52, p<.001). This

result is expected and consistent with TCE perspective

which stated that consumers will choose transaction

methods that economize on transaction cost and

perceived risks [24]. When making buying decision,

consumers such like motorists will prefer a product or

service that costs the least among all the available

services (e.g., manual toll service). In other words,

people weigh costs and benefits when choosing a

product or service. This consideration will affect their

intention whether to adopt ETC system service or not.

Likewise, if motorists perceive high transaction cost or

risks in ETC system, they will be less willing to adopt

it.

Lastly, this study also supported the hypothesis that

transaction frequency is positively related to the

intention of ETC system adoption (H4) (beta=0.37,

p<.001). As Williamson [24, p.60] stated, higher

levels of transaction frequency provide an incentive for

internal organization because “the costs of specialized

governance structures will be easier to recover for

large transactions of a recurring kind.” Similarly, an

individual is rarely a highway driver or passing

through toll plazas does need invest a specific device

such like OBU for automatic toll collection service

since it does not provide any benefit for that motorist.

However, contrary to infrequent users, the increasing

scale economies and efficiencies provided by ETC

service and perceived by frequent highway motorists

will save their travel time, make them passing through

toll plazas more quickly, and bring them more

information or value-added service in the long run.

Therefore, the hypothesis, which predicts that higher

transaction frequency of highway motorists will

influence their intention of ETC system adoption, is

supported.

6. Implications and Conclusions

6.1. Limitations and suggestions for future researches

We acknowledge that a number of research

limitations exist in our research which should be

overcome in the future. First, the conclusions drawn

from our study are based on cross-sectional data. Our

conceptual argument proposed that higher uncertainty

and higher asset specificity will create higher

transaction cost and perceived risks, thus reducing the

intention of ETC system adoption. With our cross-

sectional data, we only took a snapshot of this model.

A stricter test of our argument, however, would be to

use a longitudinal study to evaluate this aspect more

critically since the implementation of ETC service is

only the beginning in Taiwan so far. By using a

longitudinal study in the future, we could investigate

our research model in different time periods and make

comparisons, thus providing more insights for ETC


7

adoption phenomenon and more contributions for TCE

perspective.

Second, TCE perspective encounters several

criticisms from scholars. For example, the limitations

of TCE include its over-determination, exaggerated

threat of opportunism, “bad practice” implications as

sole reliance on rational control that deteriorates trust

and trustworthiness, and an under-socialized view of

human motivation or institutional control (e.g., [9, 7]).

Despite a detailed review of alternative theoretical

perspective is beyond the purpose of this paper,

however, the current research clearly represents a

beginning rather than an end. While we believe the

results of this study add considerably to our

understanding of ETC system adoption, the precise

relationships between various theoretical lens and

consumer’s adoption intention and behavior remain to

be explained. Hence we expect future research to

focus both replicating these findings in other contexts

and on furthering our understanding of the precise

mechanisms driving this process.

Finally, despite our model provides some insights

for the explanation of the intention of ETC system

adoption. Some possible moderating effects between

the relationship between perceived risk and the

intention of ETC system adoption is not well

understood. Future studies may benefit from

articulating the possible moderating factor such as

government’s procedural justice that enhance or

impede such ETC adoption intention that are most

compatible with such purposes. In sum, these

questions open up fertile grounds for future research

opportunities.

6.2. Implications and conclusions

Viewed from the TCE perspective, this study

contributes to the marketing and IT business value

literatures by providing empirical support for the

relationship between transaction attributes, transaction

costs, perceived risks and the intention of ETC system

adoption. Consistent with prior TCE studies, our

research findings reinforce that both uncertainty, asset

specificity and transaction frequency are critical

determinations of the choice and the intention of ETC

system service. In additions, from the managerial

point of view, our study suggests that transaction

attributes examined in the study all appear to impact

motorists intention to adopt ETC service, and thus

should be carefully considered in any ETC marketing

or promotion projects in order to engender motorist’s

trust and the willing to adopt ETC service.

Given the turbulence of many industries,

understanding what facilitates the delivery of products

and services to satisfy customers’ needs offers scholars

continuously and increasingly important challenge.

Moreover, this study nevertheless suggests that,

relative to other major theoretical perspective, there is

little questioning the success of TCE perspective not

only in generating predictions that attempt to explain

important organizational or behavioral issues, but also

in spawning tremendous interest among scholars and

practitioners in a host of other disciplines and contexts.

7. References

[1]. Ajzen, I., “The Theory of Planned Behavior,”

Organizational Behavior and Human Decision Processes, 50(2), 1991, pp. 179-211.

[2]. Anderson, J.C. and Gerbing, D.W., “Structural

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8. Appendix - Measurements

ConstructsStandardized

Loadings

UNCERTAINTY

Performance uncertainty [18]

When passing through the toll plaza, it is

difficult to be assured that:

the on-board unit (OBU) is reliable.

the OBU will perform as well as it is

supposed to.

the OBU will perform as well as

others.

0.82

0.85

0.83

Behavioural uncertainty [18]

When installing OBU and using ETC service,

it is difficult to:

return purchases.

exchange the defective OBU.

get post-sales customer service.

0.80

0.73

0.77

Environmental uncertainty [18, 21]

It is difficult to be assured that the

OBU delivery date is reliable.

It is difficult to be assured that how

much the OBU costs.

It is difficult to be assured that FETC

could continue the implementation of

the ETC service.

0.75

0.71

0.72

ASSET SPECIFICITY [18, 21]

Please specify the degree of your concerns

about the following statements (1: negligible,

2: minor, 3: fairly, 4: serious, 5: strongly

serious)

dedicated OBU only for one car.

specialized facilities (e.g., OBU, toll

card) are needed to offer ETC

service.

certain amount must be paid before

using ETC service

0.64

0.78

0.92


9

PERCEIVED RISK [16]

Overall, the thought of adopting the

ETC service causes me to be

concerned with experiencing some

kind of loss if I went ahead with the

application.

All things considered, I think I would

be making a mistake if I apply the

ETC service.

When all is said and done, I really

feel that the adoption of the ETC

service poses problems for me that I

just don’t need.

0.87

0.95

0.93

TRANSACTION FREQUENCY[18]

On average, how often do you pass through

toll plazas in highways:

(1) ten times or above per day

(2) one time or above per day

(3) several times per week

(4) several times per month

(5) one time for several months

(6) few / barely

INTENTION OF ETC SYSTEM ADOPTION [27]

I will intend to apply the ETC service

as soon as possible.

I will use the ETC service soon after

it is launched.

0.98

0.97


10

investigating factors affecting the adoption of electronic toll

Documents