Survival and Growth in Retail and Service Industries: Evidence from Franchised Chains

The Journal of Industrial Economics, Vol. 53, No. 1, pp. 1-37, 2010

Posted: 12 Jul 2010 Last revised: 6 Jun 2013

See all articles by Renata Kosova

Renata Kosova

Imperial College London

Francine Lafontaine

University of Michigan at Ann Arbor - Stephen M. Ross School of Business; University of Michigan at Ann Arbor - Department of Economics

Date Written: July 12, 2010

Abstract

Using data on franchised chains, which are the type of single-product entities emphasized in industry dynamics models, we show that age and size affect growth and survival even after controlling for chain characteristics and unobserved chain-specific efficiency. This implies that age and size affect firm growth and survival for reasons other than those emphasized in learning-type models. We also find that several chain characteristics affect growth and survival directly, and thus controlling for firm characteristics is important. Finally, we find that chain size increases rather than decreases exit among young chains, and chains converge in size over time.

Keywords: Franchising, firm growth, survival, services

JEL Classification: L11, L21, L81, M21

Suggested Citation

Kosova, Renata and Lafontaine, Francine, Survival and Growth in Retail and Service Industries: Evidence from Franchised Chains (July 12, 2010). The Journal of Industrial Economics, Vol. 53, No. 1, pp. 1-37, 2010, Available at SSRN: https://ssrn.com/abstract=1639030

Renata Kosova (Contact Author)

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Francine Lafontaine

University of Michigan at Ann Arbor - Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109-1234
United States
734-647-4915 (Phone)
734-936-0279 (Fax)

University of Michigan at Ann Arbor - Department of Economics ( email )

611 Tappan Street
Ann Arbor, MI 48109-1220
United States

Do you want regular updates from SSRN on Twitter?

Paper statistics

Abstract Views
545
PlumX Metrics