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The impact of franchisor signaling on entrepreneurship in emerging markets

Author

Listed:
  • Cintya Lanchimba

    (EPN - Escuela Politécnica Nacional)

  • Dianne H.B. Welsh

    (UNCG - University of North Carolina [Greensboro] - UNC - University of North Carolina System)

  • Muriel Fadairo

    (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc)

  • Vivian-Lara D.S. Silva

    (USP - Universidade de São Paulo = University of São Paulo)

Abstract

This article contributes to the body of knowledge on emerging economy entrepreneurship in terms of franchisor entry and expansion. The study shows that franchisors in Brazil use strategic signaling to attract potential franchisees and expand their network, in contrast with previous results regarding developed countries. Strategic signaling is associated with the context of rapid evolution, uncertainty, and institutional voids characterizing emerging economies, thus resulting in exacerbated information asymmetries. Rather than the network organizational form, Brazilian franchisors should use the contract design, more precisely the royalty rate, as a signaling device.

Suggested Citation

  • Cintya Lanchimba & Dianne H.B. Welsh & Muriel Fadairo & Vivian-Lara D.S. Silva, 2021. "The impact of franchisor signaling on entrepreneurship in emerging markets," Post-Print hal-03976359, HAL.
    • Handle: RePEc:hal:journl:hal-03976359
    DOI: 10.1016/j.jbusres.2021.03.062
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    Cited by:

    1. Welsh, Dianne H.B. & Lanchimba, Cintya & Bausch, Madeleine, 2025. "Retail franchise ecosystem dynamics: Insights from countries of varied development levels," Journal of Retailing and Consumer Services, Elsevier, vol. 82(C).
    2. Julian Bafera & Simon Kleinert, 2023. "Signaling Theory in Entrepreneurship Research: A Systematic Review and Research Agenda," Entrepreneurship Theory and Practice, , vol. 47(6), pages 2419-2464, November.
    3. Corentin Le Bot & Rozenn Perrigot & Anna Watson & Gérard Cliquet, 2025. "A dynamic integrative view of signaling strategies during the franchisee recruitment process," Post-Print hal-05077900, HAL.
    4. Ehret, Michael & Olaniyan, Rotimi, 2023. "Banking the unbanked. Constitutive rules and the institutionalization of mobile payment systems in Nigeria," Journal of Business Research, Elsevier, vol. 163(C).
    5. Mestwerdt, Sönke & Mrożewski, Matthias & Sydow, Alisa & Burkert, Nathalie, 2025. "Unveiling signaling processes in early-stage cross-border investment: Evidence from South African entrepreneurs and European business angels," Journal of World Business, Elsevier, vol. 60(5).

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