Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/142250
Authors: 
Fan, Ying
Kühn, Kai-Uwe
Lafontaine, Francine
Year of Publication: 
2016
Series/Report no.: 
DICE Discussion Paper 223
Abstract: 
Financial constraints are considered an important impediment to growth for small businesses. We study theoretically and empirically the relationship between the financial constraints of agents and the organizational decisions and growth of principals, in the context of franchising. We find that a 30 percent decrease in average collateralizable housing wealth in an area is associated with a delay in chains' entry into franchising by 0.33 years on average, or 10 percent of the average waiting time, and a reduction in chain growth and hence a reduction in franchised chain employment of about 9 percent.
Subjects: 
contracting
incentives
principal-agent
empirical
collateralizable housing wealth
entry
growth
JEL: 
L14
L22
D22
D82
L8
ISBN: 
978-3-86304-222-6
Document Type: 
Working Paper

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