The impact of franchisor signaling on entrepreneurship in emerging markets

Cintya Lanchimba, Dianne H.B. Welsh, Muriel Fadairo () and Vivian-Lara D.S. Silva
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Dianne H.B. Welsh: UNCG - University of North Carolina [Greensboro] - UNC - University of North Carolina System
Muriel Fadairo: IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc
Vivian-Lara D.S. Silva: USP - Universidade de São Paulo = University of São Paulo

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Abstract: This article contributes to the body of knowledge on emerging economy entrepreneurship in terms of franchisor entry and expansion. The study shows that franchisors in Brazil use strategic signaling to attract potential franchisees and expand their network, in contrast with previous results regarding developed countries. Strategic signaling is associated with the context of rapid evolution, uncertainty, and institutional voids characterizing emerging economies, thus resulting in exacerbated information asymmetries. Rather than the network organizational form, Brazilian franchisors should use the contract design, more precisely the royalty rate, as a signaling device.

Keywords: New business development; Emerging market economies; Franchising; Signaling; Brazil (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

Published in Journal of Business Research, 2021, 131 (C), pp.337-348. ⟨10.1016/j.jbusres.2021.03.062⟩

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Journal Article: The impact of franchisor signaling on entrepreneurship in emerging markets (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03976359

DOI: 10.1016/j.jbusres.2021.03.062

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