How firm strategies impact size of partner-based retail networks: Evidence from franchising

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Author(s)
Kacker, Manish
Dant, Rajiv
Emerson, Jamie
Coughlan, Anne
Griffith University Author(s)
Year published
2015
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How do firms' partnering strategies impact the size of their partner‐based retail networks? We draw on agency theory to address this question in the context of franchising. Our econometric analyses (based on 9 years of longitudinal balanced panel data) include assessment of data nonstationarity and estimation of a dynamic panel data model that accounts for unobserved heterogeneity and endogeneity. Our findings indicate that franchisee network size is driven more by franchisor strategies that mitigate agency costs than by strategies that simply lower entry and ongoing costs and barriers for franchisees.How do firms' partnering strategies impact the size of their partner‐based retail networks? We draw on agency theory to address this question in the context of franchising. Our econometric analyses (based on 9 years of longitudinal balanced panel data) include assessment of data nonstationarity and estimation of a dynamic panel data model that accounts for unobserved heterogeneity and endogeneity. Our findings indicate that franchisee network size is driven more by franchisor strategies that mitigate agency costs than by strategies that simply lower entry and ongoing costs and barriers for franchisees.
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Journal Title
Journal of Small Business Management
Copyright Statement
© 2015 International Council for Small Business. This is the peer reviewed version of the following article: How Firm Strategies Impact Size of Partner-Based Retail Networks:
Evidence from Franchising, Journal of Small Business Management, Volume 54, Issue 2, 2015, which has been published in final form at https://doi.org/10.1111/jsbm.12155. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving (http://olabout.wiley.com/WileyCDA/Section/id-828039.html)
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This publication has been entered into Griffith Research Online as an Advanced Online Version.
Subject
Marketing not elsewhere classified
Banking, Finance and Investment
Business and Management
Marketing