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

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.