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

Yun Jeong Choi; Jee Young Kim; Min Hee You

doi:10.1111/coep.12458

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

Yun Jeong Choi, Jee Young Kim, Min Hee You

Department of Economics

Research output: Contribution to journal › Article › peer-review

1 Citation (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 language	English
Pages (from-to)	496-514
Number of pages	19
Journal	Contemporary Economic Policy
Volume	38
Issue number	3
DOIs	https://doi.org/10.1111/coep.12458
Publication status	Published - 2020 Jul 1

Bibliographical note

Publisher Copyright:
© 2020 Western Economic Association International

All Science Journal Classification (ASJC) codes

Business, Management and Accounting(all)
Economics and Econometrics
Public Administration

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10.1111/coep.12458

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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).",

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AB - 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).

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

Abstract

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