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Institutions and contracts: Franchising

Author

Listed:
  • Miguel Amaral

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Eshien Chong

    (IAE Paris - Sorbonne Business School)

  • Stéphane Saussier

    (IAE Paris - Sorbonne Business School)

Abstract

This paper investigates a new dataset of franchise networks in nine countries in order to assess whether and to what extent do institutions influence the practice of franchising. Our regressions relate the structure of franchise networks (the rate of franchised units as opposed to corporate units) to individual parameters supposed to reflect the extent of moral hazards on the franchisor's and franchisee's sides and, more specifically, to various institutional parameters of the franchisor's country, namely, the legal tradition, the level of procedural formalism, the constraints imposed by labour regulation and the effectiveness of trademark protection. While agency theory parameters seem to perform rather badly in this international setting, institutions such as trademark protection and labour regulation have more explanatory power: greater trademark protection encourages franchising and the impact of labour regulation is mostly positive, depending on the type of labour regulation that is being considered. The effect of legal tradition and formalism seems negligible once these parameters are taken in.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Miguel Amaral & Eshien Chong & Stéphane Saussier, 2006. "Institutions and contracts: Franchising," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-02494112, HAL.
    • Handle: RePEc:hal:cesptp:hal-02494112
    DOI: 10.1007/s10657-006-5671-4
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    1. is not listed on IDEAS
    2. Traversac, Jean-Baptiste & Rousset, Sylvain & Perrier-Cornet, Philippe, 2011. "Farm resources, transaction costs and forward integration in agriculture: Evidence from French wine producers," Food Policy, Elsevier, vol. 36(6), pages 839-847.
    3. Barthélemy, Jérôme, 2011. "Agency and institutional influences on franchising decisions," Journal of Business Venturing, Elsevier, vol. 26(1), pages 93-103, January.
    4. Olivier Cochet & Thomas Ehrmann, 2007. "Preliminary evidence on the appointment of institutional solutions to franchisor moral hazard-the case of franchisee councils," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 41-55.
    5. Muriel Fadairo & Cintya Lanchimba Lopez, 2012. "Performance in distribution systems : What is the influence of the upstream firm’s organizational choices ?," Working Papers 1224, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    6. Lai, Chung-hui & Wang, Vey, 2015. "Effects of intellectual property rights protection and integration on economic growth and welfare," Economics Discussion Papers 2015-1, Kiel Institute for the World Economy (IfW Kiel).
    7. Chung-Hui Lai, 2015. "Effects of Intellectual Property Rights Protection and Integration on Economic Growth and Welfare," Journal of Economics and Management, College of Business, Feng Chia University, Taiwan, vol. 11(2), pages 143-162, July.
    8. Muriel Fadairo & Cintya Lanchimba, 2012. "Performance in distribution systems : What is the influence of the upstream firm's organizational choices ?," Working Papers halshs-00727382, HAL.
    9. Karaan, Mohammad, 2003. "An Institutional Economic Appraisal Of Worker Equity Schemes In Agriculture:," 2003 Annual Conference, October 2-3, 2003, Pretoria, South Africa 19094, Agricultural Economics Association of South Africa (AEASA).

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