The Dynamics of Contractual Design: Determinants of Contract Duration in Franchising Networks

Odile Chanut, Magali Chaudey (), Muriel Fadairo and Frédéric Perdreau
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Odile Chanut: University of Aix-Marseille
Magali Chaudey: GATE Lyon-St Etienne
Muriel Fadairo: GATE Lyon-St Etienne
Frédéric Perdreau: University of Lyon

A chapter in Interfirm Networks, 2015, pp 9-33 from Springer

Abstract: Abstract This paper deals with the contractual design in franchising networks. We investigate the determinants and the evolution of contracts duration on the basis of a multidisciplinary approach using law, management and economics. Taking into account the traditional explanation of franchise contracts duration in terms of specific investments, this paper focuses on the dynamics of contractual design. The empirical analysis is based on franchise French data, coupled with financial data. We use descriptive statistics and econometrics. A dynamic panel data model for contract length is estimated. Our results highlight specific dynamics and adjustment costs in the determination of contracts duration.

Keywords: Adjustment Cost; Specific Investment; Target Duration; Contract Duration; Transaction Cost Theory (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-319-10184-2_2

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DOI: 10.1007/978-3-319-10184-2_2

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