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Asset Specificity and Vertical Integration in Franchising
ALANSON P. MINKLER and TIMOTHY A. PARK
Review of Industrial Organization
Vol. 9, No. 4 (August 1994), pp. 409-423
Published by: Springer
Stable URL: http://www.jstor.org/stable/41798523
Page Count: 15
You can always find the topics here!Topics: Franchise agreements, Vertical integration, Transaction costs, Intangible assets, Trademarks, Economic growth models, Opportunistic behavior, Business structures, Brands, Economic capital
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This study empirically tests transaction cost hypotheses with the use of data on publiclyowned franchisee! firms. We employ measures of the proportion of company-owned outlets for the degree of integration and brand name capital for the degree of asset specificity. The results suggest that for the sampled firms the degree of asset specificity is positively related to the degree of vertical integration. Additionly, increases in the real interest rate and firm growth rates are found to be positively related with vertical integration, while increases in unanticipated growth and firm experience are negatively related with vertical integration.
Review of Industrial Organization © 1994 Springer