RADIUS RESTRICTION AND FIRMS' SURVIVAL: EVIDENCE FROM THE COFFEE FRANCHISE INDUSTRY

Yun Jeong Choi, Jee Young Kim, Min Hee You

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

This study investigates the effects of distance restrictions on Korean coffee shops' survival. Restrictions were implemented by South Korea's Fair Trade Commission to limit the headquarters' opening of new shops to protect franchisees' territorial rights. Using extended Cox proportional hazard regression analyses, we find that the hazard rates of all coffee shops decreased significantly under the radius restriction, with more substantial decreases for young stores, attenuating over store ages. However, selective restrictions on five big brands influencing interbrand competition might have changed the coffee franchise industry's landscape and thereby widening the gap between exempted brand coffee shops and the rest. (JEL D22, L40, L66).

Original languageEnglish
Pages (from-to)496-514
Number of pages19
JournalContemporary Economic Policy
Volume38
Issue number3
DOIs
Publication statusPublished - 2020 Jul 1

Bibliographical note

Publisher Copyright:
© 2020 Western Economic Association International

All Science Journal Classification (ASJC) codes

  • General Business,Management and Accounting
  • Economics and Econometrics
  • Public Administration

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