International Franchising Governance Modes : An Emerging Market Perspective

Abstract

This dissertation analyzes the governance mode choice of Brazilian franchisors expanding their operations abroad. The purpose is to understand which aspects influence the international governance mode choice from an emerging market franchisor standpoint. Four papers were developed. The first article offers an in-depth analysis of franchising literature in emerging and developing markets using bibliometric techniques. The following three articles address different theoretical lenses to provide a comprehensive understanding of a multidimensional decision-making process as the international governance mode choice. The second article tests an integrative model of governance mode choice through a quantitative approach using a representative sample of data from the Brazilian Franchising Association - ABF. The integrative model encompasses the transaction cost, agency, resource-based, and organizational capabilities theories. The third article evaluates the applicability of internalization theory assumptions of asset specificity and host country's protection of intellectual property in an emerging market context through a mixed-method approach. The fourth article explores stakeholders' influence, namely business groups, government, and local network of stakeholders, on the Brazilian franchisors' governance mode decision through statistical tests with ABF data. The study encompasses the lack of research on international governance mode and emerging markets firms expanding to international markets, contributing to the entry mode and international franchising literature. Moreover, Brazil offers an interesting context in which to investigate the topic. Brazilian franchisors with operations abroad represent emerging market multinationals, which possess unique characteristics in their international expansion strategies. We explore how specificities in the home country of EM firms might affect the existing theories' predictions, contributing to Goldilocks' debate about the suitability of mainstream theoretical perspectives.