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Growing through copying: The negative consequences of innovation on franchise network growth

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  • Szulanski, Gabriel
  • Jensen, Robert J.
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    Abstract

    We explore how more exactly copying a blueprint for establishing a franchise network in a new country influences franchising network growth. We test opposing hypotheses using panel data involving the transfer of franchising knowledge to 23 different countries, measuring the degree to which master licensees 'copy exactly' knowledge concerning how to grow a network in their country and the effect that their approach has on subsequent network growth. We conclude that a strategy of copying more exactly seems to enhance growth and that the benefits of more exactly replicating knowledge in the 1st year of a local network's existence persist for several years. Thus, innovation, in this specific context, seems to hinder firm growth.

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    Bibliographic Info

    Article provided by Elsevier in its journal Research Policy.

    Volume (Year): 37 (2008)
    Issue (Month): 10 (December)
    Pages: 1732-1741

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    Handle: RePEc:eee:respol:v:37:y:2008:i:10:p:1732-1741

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    Web page: http://www.elsevier.com/locate/respol

    Related research

    Keywords: Replication Knowledge transfer Franchising Copy exactly Growth;

    References

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    13. Del Monte, Alfredo & Papagni, Erasmo, 2003. "R&D and the growth of firms: empirical analysis of a panel of Italian firms," Research Policy, Elsevier, Elsevier, vol. 32(6), pages 1003-1014, June.
    14. Robert J. Jensen & Gabriel Szulanski, 2007. "Template Use and the Effectiveness of Knowledge Transfer," Management Science, INFORMS, INFORMS, vol. 53(11), pages 1716-1730, November.
    15. Gilsing, Victor & Nooteboom, Bart, 2006. "Exploration and exploitation in innovation systems: The case of pharmaceutical biotechnology," Research Policy, Elsevier, Elsevier, vol. 35(1), pages 1-23, February.
    16. Kaufmann, Patrick J. & Eroglu, Sevgin, 1999. "Standardization and adaptation in business format franchising," Journal of Business Venturing, Elsevier, vol. 14(1), pages 69-85, January.
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    Cited by:
    1. Esther Tippmann & Pamela Sharkey Scott & Vincent Mangematin, 2012. "Capability Evolution and a Replication Strategy: Stimulating Middle Management Knowledge Search Routines and Architecture Competences," Working paper serie RMT - Grenoble Ecole de Management hal-00864332, HAL.
    2. Iizuka, Michiko & Borbon-Galvez, Yari, 2009. "Compliance with the private standards and capacity building of national institutions under globalization: new agendas for developing countries?," MERIT Working Papers 025, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Chia Sun, 2014. "A conceptual framework for R&D strategic alliance assessment for Taiwan’s biotechnology industry," Quality & Quantity: International Journal of Methodology, Springer, Springer, vol. 48(1), pages 259-279, January.
    4. Jell-Ojobor, Maria & Windsperger, Josef, 2014. "The Choice of Governance Modes of International Franchise Firms — Development of an Integrative Model," Journal of International Management, Elsevier, Elsevier, vol. 20(2), pages 153-187.
    5. repec:hal:wpaper:hal-00864332 is not listed on IDEAS

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