Foreign ownership strategies of UK and US international franchisors: An exploratory application of Dunning's envelope paradigm |
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Institution: | 2. University of North Dakota, Gamble Hall Room 290, 293 Centennial, Drive Stop 8098, Grand Forks, ND 58202-8098, United States;1. Perdue School of Business, Salisbury University, 1101 Camden Ave., Salisbury, MD 21801, United States;2. Dept. of Business Administration, Lerner College of Business & Economics, University of Delaware, Newark, DE 19716, United States |
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Abstract: | In industries dominated by franchising as the dominant mode of entry there is a tendency that franchisors pursue different ownership strategies. We test ownership strategies of international franchisors using Dunning's ‘envelope’ Ownership, Location and Internalization (OLI) paradigm. The ownership choices of international franchisors’ foreign market entry based on the strategic intent of exploitation and exploration are well explained by Dunning's ‘envelope’ OLI paradigm. Our results show that the dynamic L advantages (perceiving foreign locations as a source of learning), the static O advantages (nationality of the firm) and static L advantages (the role of foreign applicants) have a significant influence on the selection of foreign entry strategy by international franchisors. |
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