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Survival of new firms in the Brazilian franchising segment: an empirical study

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  • Luis Otávio Façanha
  • Marcelo Resende
  • Vicente Cardoso
  • Bruno Henrique Schröder

Abstract

This paper investigates the survival patterns of Brazilian franchising firms for the period 1994-1999. First, we considered the (percentage) survival of newly created franchisors in the following years. Survival functions were obtained by means of the Kaplan-Meier estimator for the selected sectors and they indicated sharp declines in the survival rates over time but with differential patterns across sectors. Finally, an econometric analysis based on the Cox proportional hazard model considered the explanatory variables pertaining to size, age and support regarding the legal aspects, location choice and training. The evidence indicates that the supports provided by the franchisor have a positive impact on the probability of survival of new firms, whereas there is partial evidence favoring a positive effect of firm size on survival.

Suggested Citation

  • Luis Otávio Façanha & Marcelo Resende & Vicente Cardoso & Bruno Henrique Schröder, 2013. "Survival of new firms in the Brazilian franchising segment: an empirical study," The Service Industries Journal, Taylor & Francis Journals, vol. 33(11), pages 1089-1102, August.
    • Handle: RePEc:taf:servic:v:33:y:2013:i:11:p:1089-1102
    DOI: 10.1080/02642069.2011.627433
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    References listed on IDEAS

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    1. Jan W. Rivkin & Nicolaj Siggelkow, 2003. "Balancing Search and Stability: Interdependencies Among Elements of Organizational Design," Management Science, INFORMS, vol. 49(3), pages 290-311, March.
    2. Renáta Kosová & Francine Lafontaine, 2010. "Survival And Growth In Retail And Service Industries: Evidence From Franchised Chains," Journal of Industrial Economics, Wiley Blackwell, vol. 58(3), pages 542-578, September.
    3. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, April.
    4. Scott Shane & Maw-Der Foo, 1999. "New Firm Survival: Institutional Explanations for New Franchisor Mortality," Management Science, INFORMS, vol. 45(2), pages 142-159, February.
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    Cited by:

    1. Marcelo Resende & Vicente Cardoso & Luis Otávio Façanha, 2016. "Determinants of survival of newly created SMEs in the Brazilian manufacturing industry: an econometric study," Empirical Economics, Springer, vol. 50(4), pages 1255-1274, June.
    2. Marcelo Resende & Vicente Cardoso, 2013. "Gibrat´s law in Brazilian franchising: an empirical note," Economics Bulletin, AccessEcon, vol. 33(1), pages 247-256.
    3. Luis Otávio Facanha & Marcelo Resende & Vicente Cardoso, 2012. "Determinants of Survival of Newly Created SMEs in the Brazilian Manufacturing: An Econometric Study," CESifo Working Paper Series 3735, CESifo.
    4. Víctor Manuel Bellido‐Jiménez & Domingo Martín‐Martín & Isidoro Romero, 2021. "The survival of new businesses in Andalusia (Spain): Impact of urbanization, education, and gender," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(1), pages 25-41, February.

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    More about this item

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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