*We thank the Editor, an anonymous referee, and Patrick Bajari, Andrew Bernard, Michael Gort, Boyan Jovanovic, Steven Klepper, Jagadeesh Sivadasan, Eric Van Den Steen, and participants at several conferences and seminars for their comments. We also thank Robert Picard for his assistance. The usual caveat applies.
SURVIVAL AND GROWTH IN RETAIL AND SERVICE INDUSTRIES: EVIDENCE FROM FRANCHISED CHAINS*
Version of Record online: 3 SEP 2010
© 2010 The Authors. The Journal of Industrial Economics © 2010 Blackwell Publishing Ltd. and the Editorial Board of The Journal of Industrial Economics
The Journal of Industrial Economics
Volume 58, Issue 3, pages 542–578, September 2010
How to Cite
KOSOVÁ, R. and LAFONTAINE, F. (2010), SURVIVAL AND GROWTH IN RETAIL AND SERVICE INDUSTRIES: EVIDENCE FROM FRANCHISED CHAINS. The Journal of Industrial Economics, 58: 542–578. doi: 10.1111/j.1467-6451.2010.00431.x
†Authors' affiliations: School of Hotel Administration, Cornell University, 545B Statler Hall, Ithaca, New York 14853, U.S.A. e-mail: firstname.lastname@example.org
‡Ross School of Business, University of Michigan, 701 Tappan St., Ann Arbor, Michigan 48109, U.S.A. e-mail: email@example.com
- Issue online: 3 SEP 2010
- Version of Record online: 3 SEP 2010
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.