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Organizational Form and Performance: Evidence from the Hotel Industry

Author

Listed:
  • Renáta Kosová

    (Cornell University)

  • Francine Lafontaine

    (University of Michigan)

  • Rozenn Perrigot

    (Graduate School of Management, University of Rennes 1 and ESC Rennes)

Abstract

We use a unique proprietary panel data set from a large hotel company to study how organizational form affects hotel pricing and performance. Aggregate data patterns suggest sizable performance differences between franchised and company-operated hotels. However, after controlling for other factors, we find that if significant at all, such differences are economically small. Moreover, once we endogenize the choice of organizational form, the differences become insignificant. We conclude that the company chooses which hotels to franchise and operate corporately such that, conditional on hotel and market characteristics, it obtains consistent outcomes across organizational forms. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Renáta Kosová & Francine Lafontaine & Rozenn Perrigot, 2013. "Organizational Form and Performance: Evidence from the Hotel Industry," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1303-1323, October.
    • Handle: RePEc:tpr:restat:v:95:y:2013:i:4:p:1303-1323
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    Keywords

    hotel pricing; hotel performance; organizational form;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L8 - Industrial Organization - - Industry Studies: Services
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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