[Purpose] Focusing on the principal-agent relationship between Korea Post and individual post offices, this study examines the location of postal agencies through the lens of optimal incentive design. It empirically analyzes location-specific econ...
[Purpose] Focusing on the principal-agent relationship between Korea Post and individual post offices, this study examines the location of postal agencies through the lens of optimal incentive design. It empirically analyzes location-specific economic factors influencing the choice of organizational form (directly managed offices vs. postal agencies) in different environments.<BR/>[Methodology] This study identifies key business environment factors affecting the choice between directly managed post offices and postal agencies, including revenue size, revenue volatility, the importance of sales efforts, market competition intensity, and supervision costs. Using these factors as independent variables and the presence of a postal agency as the dependent variable, a logistic regression model was developed and analyzed empirically.<BR/>[Findings] The empirical analysis reveals that postal agencies are more likely to be found in locations where revenue size and volatility are low, sales efforts are important, market competition is high, proximity to a central post office is short, and post office density is high.<BR/>[Implications] This study explains the location of postal agencies from the perspective of organizational form choice under a principal-agent model. By leveraging internal operational data from individual post offices, this empirical analysis offers valuable insights for postal service policy.