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Retail Contracting and Organizational Form: Alternatives to Chain Affiliation in the Motel Industry

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Author Info
Michael J. Mazzeo
Abstract

Most of the existing empirical literature on franchising investigates the share of company-owned versus franchised establishments within large retail firms. This literature typically has not considered the decision of a business owner to operate an independent business or to become a franchisee. This paper empirically analyzes what determines whether independent ownership or affiliation is observed, using data on the affiliation status of 2,293 motel establishments located throughout the United States. Heterogeneity in the underlying economic environment helps explain affiliation choices at the establishment level. The results also suggest that failure to consider independent establishments may explain the puzzling negative correlation between risk and vertical integration commonly found in the empirical franchising literature. Copyright Blackwell Publishing 2004.

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Article provided by Blackwell Publishing in its journal Journal of Economics & Management Strategy.

Volume (Year): 13 (2004)
Issue (Month): 4 (December)
Pages: 599-615
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Handle: RePEc:bla:jemstr:v:13:y:2004:i:4:p:599-615

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  1. Renata Kosova & Francine Lafontaine, 2006. "Firm Survival and Growth in Retail and Service Industries: Evidence from Franchised Chains," Working Papers 0007, School of Business, The George Washington University. [Downloadable!]
  2. Brian Wu & Anne Marie Knott, 2005. "Entrepreneurial Risk and Market Entry," The Office of Advocacy Small Business Working Papers 05bwmk, U.S. Small Business Administration, Office of Advocacy. [Downloadable!]
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This page was last updated on 2009-12-19.

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