Cintya Lanchimba

Organizational choices and performance in distribution systems

This article studies the performance of distribution networks as the result of a range of organizational choices. The analytical part of the article surveys the vast literature devoted to franchising and dual distribution. From this framework, several testable propositions linking network performance to organizational choices are derived. Three complementary criteria of performance are taken into account: the internationalization rate, the expansion rate and the market share. This article provides evidence for the simultaneity between these performance criteria, analytically related as indicators of the network commercial performance. Thus, the econometrical model is defined as a system of simultaneous equations, free of endogeneity regarding the explanatory variables. The estimations on recent French data obtained using the three-stage least squares method provide robust results and show that the type of distribution network, the number of company-owned outlets in the network, the type of sector and the choice to manage several networks simultaneously affect the performance.

Signaling the value of a business concept : Evidence from a structural model with Brazilian franchising data

Within the wide literature regarding franchising, a few studies were devoted to the adverse selection phenomena in the franchise relationships, and to the signaling explanation of the franchisors’ organizational choices. Previous empirical works concluded that the signaling framework is not well adapted to study franchising. However, most of the empirical literature has focused on developed countries. This empirical paper deals with the case of Brazil. We estimate on recent franchising data a structural equation model capturing the simultaneous influences of a valuable business concept. The paper provides evidence that the signaling theory is adequate to understand the organizational choices regarding the ownership structure of franchised networks in emerging markets. The estimation results suggest indeed that the Brazilian franchisors use signaling devices, and that the necessity to signal the value of a business concept affects the organizational choices at the network level.

Franchisors' choice between royalties and fixed fees evidence from Brazil

In franchise contracts, the royalty rate and the fixed entrance fee are the main monetary clauses defining the payment scheme between the franchisor and the franchisee. In the traditional agency view, the presence of distant outlets leads the franchisor to choose a payment mechanism designed to provide incentives to the franchisee; that is, a low royalty rate associated with a high fixed fee. Based on a unique panel dataset, we provide evidence that, in the Brazilian context, spatial dispersion has the opposite impact, with interesting practical and research implications.

Efectos de los Ingresos del Hogar, Educación de la Mujer y Participación Laboral Femenina Sobre la Fecundidad Ecuatoriana

This paper studies the economic determinants of fecundity. In the analytical part, authors have analyzed the vast economic literature devoted to the study of fecundity, from which several testable hypotheses that relates it to household income, education level of the mother and her occupation have been derived. The article provides empirical evidence from 46,716 Ecuadorian women between 12 and 49 in 2006 and 2014. In particular, it was found, through count data models, that years of mother education and household income have a negative effect on fecundity.

Spatial strategies in Brazilian Franchising; Behavior categories and Performance Outcome

This empirical article deals with the location strategy and performance outcomes of franchised chains in Brazil. Brazilian franchising has experienced vertiginous process of expansion in recent years, being present in different regions of this country of continental size, including the most remote and less developed. Based on the background literature in economics and management regarding location choices and spatial competition in retailing, we use a new and unique dataset to distinguish several behavior categories in spatial strategies of franchising chains in Brazil, via a two-step cluster analysis. The performance outcomes are then studied with econometric estimations on panel data. Our results provide evidence that the choice for agglomeration, and the location in areas with a high population and a high human development index, lead to higher chain performances.

Relationship between Risk and Incentives in Franchise Contracting

The relationship between risk and incentives in franchise contracting is still an unsolved issue in the literature. According to the standard principal-agent model, a trade-off emerges between the franchisees protection against risk and incentive motivation. Contrary to this traditional view, we argue that the relationship between risk and incentives can be positive. In franchise contracting, this implies that the royalty rate decreases with risk. Using a unique panel dataset combining French franchise and financial data, we address this issue empirically and analyze the impact of a risk- and incentive-adjusted royalty rate on performance. The data support the hypothesis of a negative relationship between risk and the royalty rate, which contradicts the standard prediction of the agency theory. Furthermore, the estimation of random effect models provides evidence that chain performance increases with a risk- and incentive-adjusted royalty rate.

Multi-unit Franchise System Performance: An Organizational Economics Analysis

Previous studies have not examined the performance of multi-unit franchise systems. The paper addresses this research gap by investigating franchisor performance of multi-unit franchise system from an organizational economics perspective by using data from Germany and Switzerland. According to the agency theory they show that under a strong brand name free-riding risk may be reduced through MUF and hence MUF positively influences the performance the systems. In addition, the data support the transaction cost hypothesis that environment uncertainty is negatively related to the performance of MUF systems. Furthermore, using property rights theory, they show that intangible local market assets are negatively and intangible system-specific assets are positively associated with MUF performance. Finally, the results indicate that decentralization of decision making has a positive performance effect on MUF systems.

Network Form and Performance. The Case of Multi-Unit Franchising

Multi-unit franchising (MUF) is a governance form inside franchising networks where the franchisor transfers to the franchisees the right to own and operate more than one outlet. While previous empirical literature has revealed various advantages of MUF as compared to single-unit franchising (SUF), we study the impact of this governance form on the network performance, taking into account different contexts. Our results from propensity score matching show that MUF leads to higher performance. However, non-parametric estimations highlight thresholds suggesting that a mix of SUF and MUF is a more efficient governance form than a pure MUF network.

Optimal Monetary Provisions in Plural Form Franchise Systems; A Theoretical Model of Incentives with Two Risk-Averse Agents

Empirical studies show that most franchise chains use dual distribution - or a plural form franchise system - characterized by the coexistence of franchised units and company- owned retail units in the same distribution network. Therefore, this paper focuses on dual distribution and considers the di fferent contractual arrangements in this type of franchise system. The paper contributes to the theoretical eff orts at developing a model to study the optimal determination of the share parameters (commission and royalty rates) in a mixed system.