Factors Influencing the Internationalization of Brazilian Franchise Chains: Geographic Dispersion and Business Group Affiliation

Abstract

This paper investigates the factors that explain the low internationalization rate of Brazilian franchise chains. We seek to identify whether the company's resources, such as monitoring experience, geographic dispersion in the domestic market and reputation, and institutional aspects, such as business groups affiliation, influence the probability of Brazilian franchise networks expand overseas. Using data provided by the Brazilian Franchising Association (ABF), the relation between these four aspects and the chances of internationalization are investigated through a logistic regression for a base of 420 Brazilian franchise chains, 49 internationalized and 371 not internationalized . The results confirmed the hypotheses related to the national geographic dispersion, franchisors with greater geographic dispersion in the domestic market are more likely to internationalize, and business group affiliation, franchisors affiliated to groups are more likely to internationalize. This study innovates by quantitatively proving that national geographic dispersion and business group affiliation are factors that determine internationalization of emerging market franchise chains, such as Brazil.

Keywords

• franchising internacional
• franquias
• internacionalização
• dispersão geográfica