Externality and Organizational Choice in Franchising

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dc.contributor.authorDnes, Antony William
dc.contributor.authorGaroupa, Nuno
dc.date.accessioned2017-04-10T21:13:12Z
dc.date.available2017-04-10T21:13:12Z
dc.date.issued2005-01
dc.description.abstractIn this paper, we examine some implications of externality for the organization of firms. The need to control externality explains the selection, at the level of the chain, of full integration, dealerships or franchising systems, or systems of dual distribution where company and franchised outlets operate simultaneously, in preference to unrestricted retailing. We show that there could be a trade-off between managerial motivation and effective controlling of externality. This trade-off can explain the selection of particular organizational structures within franchising. In particular, non-separable externality, where the value of the externality depends upon characteristics of both the generating and affected unit, is costly to control contractually and could encourage integration.
dc.identifier.citationDnes, Antony and Nuno Garoupa. "Externality and Organizational Choice in Franchising." Journal of Economics and Business, vol. 57, 01 Jan. 2005, pp. 139-149. EBSCOhost, doi:10.1016/j.jeconbus.2004.09.005.
dc.identifier.issn0148-6195
dc.identifier.otherdoi:10.1016/j.jeconbus.2004.09.005.
dc.identifier.urihttp://hdl.handle.net/11416/270
dc.identifier.urihttps://search.ebscohost.com/login.aspx?direct=true&AuthType=shib&db=edselp&AN=S0148619505000068&site=eds-live&scope=site&custid=s5615486
dc.publisherJournal of Economics and Business
dc.subjectExternality
dc.subjectFranchising
dc.titleExternality and Organizational Choice in Franchising
dc.typeArticle

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