The Quality of Institutions and Organizational Form Decisions: Evidence from Within the Firm
Rozenn Perrigot
- Fonction : Auteur
- PersonId : 179862
- IdHAL : rozenn-perrigot
- ORCID : 0000-0002-2431-0973
- IdRef : 112872425
Nathan E. Wilson
- Fonction : Auteur
- PersonId : 1020709
Résumé
In many retail and service sectors, firms have to establish a physical presence in a geographic market to access customers there. In countries where the quality of institutions is low, this can put assets at risk. We use data on the operations of a multinational, multibrand hotel company to show that in environments where local institutions are weaker—as proxied mainly by the World Bank's Checks index—the company eschews direct ownership. Rather than increasing its reliance on franchising, as predicted by some models, the company relies more on another form of organization commonly used in this industry, namely management contracts. We explain these patterns by emphasizing how the quality of the institutional environment affects the cost of using equity‐based organizational forms, per arguments in the current literature, but also the cost of enforcing the terms of franchise contracts.
Domaines
Gestion et managementFormat du dépôt | Notice |
---|---|
Type de dépôt | Article dans une revue |
Résumé |
en
In many retail and service sectors, firms have to establish a physical presence in a geographic market to access customers there. In countries where the quality of institutions is low, this can put assets at risk. We use data on the operations of a multinational, multibrand hotel company to show that in environments where local institutions are weaker—as proxied mainly by the World Bank's Checks index—the company eschews direct ownership. Rather than increasing its reliance on franchising, as predicted by some models, the company relies more on another form of organization commonly used in this industry, namely management contracts. We explain these patterns by emphasizing how the quality of the institutional environment affects the cost of using equity‐based organizational forms, per arguments in the current literature, but also the cost of enforcing the terms of franchise contracts.
|
Titre |
en
The Quality of Institutions and Organizational Form Decisions: Evidence from Within the Firm
|
Auteur(s) |
Francine Lafontaine
1
, Rozenn Perrigot
2
, Nathan E. Wilson
3
1
University of Michigan [Ann Arbor]
( 24332 )
- 500 Church Street Ann Arbor, MI 48109-1090
- États-Unis
2
CREM -
Centre de recherche en économie et management
( 894 )
- 7 place Hoche, BP 86514
35065 RENNES CEDEX
- France
3
Federal Trade Commission, Bureau of Economics, Washington, DC
( 519873 )
- États-Unis
|
Nom de la revue |
|
Langue du document |
Anglais
|
Vulgarisation |
Non
|
Comité de lecture |
Oui
|
Audience |
Internationale
|
Date de publication |
2017-06
|
Volume |
26
|
Numéro |
2
|
Page/Identifiant |
375 - 402
|
Projet(s) ANR |
|
Domaine(s) |
|
DOI | 10.1111/jems.12185 |
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