Title: The effect of corruption on global franchising in emerging markets

Authors: Veronica Baena

Addresses: Department of Business Administration, Universidad Europea de Madrid, C/Tajo, s/n. Urb. El Bosque, s/n 28670-Villaviciosa de Odon-(Madrid) Spain

Abstract: Although emerging markets are some of the fastest growing economies and represent countries that are experiencing a substantial economic transformation, little is known about the factors influencing choices of foreign entry mode in those markets. In an attempt to expand our knowledge of this topic, this paper presents an empirical assessment of the relationship between corruption and the four possible modes of entry that franchiser companies can adopt overseas: direct franchising, master franchising, joint venture and direct investments. Besides country corruption, other variables – political stability, per-capita income, cultural distance, geographical distance and international experience – were also controlled.

Keywords: emerging markets; corruption; global franchising; international strategy; foreign entry mode choice; transaction cost theory; direct franchising; master franchising; joint ventures; direct investment; political stability, per-capita income; cultural distance; geographical distance; international experience.

DOI: 10.1504/IJBEM.2011.037685

International Journal of Business and Emerging Markets, 2011 Vol.3 No.1, pp.57 - 74

Available online: 25 Dec 2010 *

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