The dynamics of franchise contracting: Evidence from panel data

• 成果类型: Article
• 署名作者: Lafontaine, F; Shaw, KL
• 署名单位: University of Michigan System; University of Michigan; National Bureau of Economic Research; Carnegie Mellon University
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/250090
• 发表日期: 1999
• 页码: 1041-1080
• 关键词: Moral hazard; firm; arrangements; OWNERSHIP; selection; ECONOMICS; CHOICE; GROWTH

摘要

This paper provides the first systematic evidence on how franchisors adjust their royalty rates and franchise fees as they gain franchising experience. This evidence comes from a unique panel data set that we assembled on these monetary contract terms for about 1,000 franchisors each year for the 1980-92 period. We find that there is much persistence, over time, in franchise contract terms within firms. We find this despite sizable across-firm differences in royalty rates and franchise fees. In addition, franchisors do not systematically increase or decrease their royalty rates or franchise fees as they become better established, contrary to predictions from some specific theoretical models. We conclude that variation in contract terms is mostly determined by differences across firms, not by within-firm changes over time. Finally, we find no negative relationship, within firms, between up-front franchise fees and royalty rates.