Real options in franchise contracting: an application of transaction cost and real options theory

被引:0
作者
Ilir Hajdini
Josef Windsperger
机构
[1] University of Vienna,Department of Business Administration
来源
European Journal of Law and Economics | 2020年 / 50卷
关键词
Transaction cost theory; Real options theory; Explicit call options; Franchising; L14; D86; D23;
D O I
暂无
中图分类号
学科分类号
摘要
Previous research has not explained the use of real option clause in franchise contracting. The real option clause has two economic functions: To reduce transaction costs by mitigating opportunism risk and to increase strategic rents by exploiting the profit potential from future upside opportunities under uncertainty. We argue that franchisors will more likely use a real option clause (ROC) in franchise contracts under high behavioral uncertainty, high franchisors’ transaction-specific investments relative to franchisees’ and long contract duration. In addition, by combining transaction cost theory and real option theory, our study provides a new explanation for the impact of environmental uncertainty on the use of ROC in franchise networks by showing that there exists a U-shaped relationship between environmental uncertainty and the franchisor’s use of ROC. Overall, the data from German and Swiss franchise systems provide support of the research model.
引用
收藏
页码:313 / 337
页数:24
相关论文
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