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Survival And Growth In Retail And Service Industries: Evidence From Franchised Chains

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  • RENÁTA KOSOVÁ
  • FRANCINE LAFONTAINE

Abstract

Using data on franchised chains, which are the type of single‐product entities emphasized in industry dynamics models, we show that age and size affect growth and survival even after controlling for chain characteristics and unobserved chain‐specific efficiency. This implies that age and size affect firm growth and survival for reasons other than those emphasized in learning‐type models. We also find that several chain characteristics affect growth and survival directly, and thus controlling for firm characteristics is important. Finally, we find that chain size increases rather than decreases exit among young chains, and chains converge in size over time.

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  • Renáta Kosová & Francine Lafontaine, 2010. "Survival And Growth In Retail And Service Industries: Evidence From Franchised Chains," Journal of Industrial Economics, Wiley Blackwell, vol. 58(3), pages 542-578, September.
    • Handle: RePEc:bla:jindec:v:58:y:2010:i:3:p:542-578
    DOI: 10.1111/j.1467-6451.2010.00431.x
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