scholarly journals An Examination of the Persistent Effects of Franchising Strategy on Large Chains

2018 ◽  
Vol 9 (1) ◽  
pp. 33
Author(s):  
Vinay Kumar Garg
Keyword(s):  
Interior Design ◽  
Manufacturing Sector ◽  
Resource Scarcity ◽  
Restaurant Industry ◽  
Us Economy ◽  
The Us ◽  
Retail Chains ◽  
Quick Service ◽  
High Share ◽  
Very High

In the US economy, retail chains are extremely important since they account for a very high share of GDP relative to manufacturing sector. Retail is dominated by large franchised chains, particularly in the restaurant industry. A proven business format comprising a differentiated menu, exterior and interior design of the outlet, logos, etc., draws the interest of many prospective franchisees simultaneously, especially to large chains because it reduces their risk. Theoretical arguments are built, supported in relevant research, to present three hypotheses. Together, they form a theory of how franchising helps large chains despite abating of resource scarcity and escalation of threat from agency problems. Developing such a theory is important because extant research does not adequately address the boundary condition of large chains, even though many of them have been becoming from large to mega for many years. This theory is tested in a longitudinal sample from Quick Service Restaurant magazine, which has been publishing a list of top 50 restaurant chains for many years. All of three hypotheses are strongly supported. The paper closes with discussion of results and their implications for practice and research.

Do financial constraints affect the sensitivity of investment to cash flow? New evidence from franchised restaurant firms

2018 ◽  
Vol 24 (6) ◽  
pp. 645-661 ◽  
Author(s):  
Kwanglim Seo ◽  
Jungtae Soh ◽  
Amit Sharma
Keyword(s):  
Cash Flow ◽  
Specific Effect ◽  
Resource Scarcity ◽  
Restaurant Industry ◽  
Financing Decisions ◽  
The Us ◽  
Cash Flow Sensitivity ◽  
Investment And Financing ◽  
Restaurant Firms ◽  
New Evidence

This study investigates whether industry-specific characteristics such as franchising can affect investment and financing decisions when restaurant firms have limited access to capital. Building on the resource scarcity theory and investment-cash flow sensitivity (ICFS) model, this study developed an industry-specific ICFS model that analyzes corporate demand for franchising as a means of complementing the firms’ ability to invest in imperfect markets. Using a sample of US restaurant firms, we empirically evaluated the extent to which franchising provides greater insights into ICFS. By investigating the industry-specific effect of franchising on ICFS, the current study provides a more comprehensive understanding and explanation for the interaction between investment and financing decisions in the US restaurant industry. The findings of this study will provide restaurant investors and shareholders with valuable insights into how to monitor the investment behavior of management.

Prospects for the US economy to end-2019

2019 ◽  
Keyword(s):  
Economic Growth ◽  
Housing Market ◽  
Labour Market ◽  
Manufacturing Sector ◽  
Financial Stress ◽  
Economic Expansion ◽  
Content Type ◽  
The Third ◽  
Us Economy ◽  
The Us

Subject Prospects for the US economy to end 2019. Significance The strong US labour market and low borrowing costs for businesses and individuals are helping to sustain the decade-long economic expansion. GDP grew by more than 3% in January-March, the third quarter out of four in which it was above 3%. The lacklustre housing market, softening manufacturing sector and rising consumer financial stress may dampen economic growth in the rest of 2019, taking it to 2.3-2.5% for the year.

Immigration in American Economic History

2018 ◽  
pp. 100-118
Author(s):  
Joseph P. Ferrie
Keyword(s):  
United States ◽  
Human Capital ◽  
Seventeenth Century ◽  
Economic History ◽  
Manufacturing Sector ◽  
The United States ◽  
Us Economy ◽  
The Us ◽  
Initial Settlement ◽  
The Impact

Immigration has been a powerful force is the US economy right from the period of initial settlement in the early seventeenth century. It has been instrumental in building the nation’s infrastructure, transforming its manufacturing sector, and growing its labor force, as it transferred human capital from where it was initially generated (abroad) to where it was productively employed (the United States). This chapter surveys the impact on the economy, on the immigrants themselves, and on the Americans they joined in four eras: (1) settlement (1600s–1700s); (2) the first “Great Wave” (1800–1890); (3) the second “Great Wave” (1890–1920s); and (4) the post-1965 period.

scholarly journals Strength in Numbers

2008 ◽  
Vol 130 (09) ◽  
pp. 48-50
Author(s):  
Alan S. Brown
Keyword(s):  
Federal Reserve ◽  
Manufacturing Sector ◽  
Electronic Products ◽  
Us Economy ◽  
A Value ◽  
The Us

This article highlights that today, however, American factories are in decline; their products cannot compete internationally, and they are being overtaken by global competitors. US manufacturers not only face very real challenges, but they also have their share of success when compared with many of their counterparts in other countries around the globe. Economists spend a lot of time arguing about the trends behind the data. Yet the debate takes place against a changing background. The US economy has grown more international and more globally integrated than anyone could have imagined 30 years ago. Federal Reserve economists use marketplace feedback to place a value on such added capability, and that is the number that shows up in the IP Index for computer and electronic products. Subtract computers from the index for the manufacturing sector, and the numbers look very different. Hence, manufacturing output should include computers and electronics, but subtracting them from the total provides a very different picture of the rest of the manufacturing economy.

scholarly journals The Decline of the U.S. Labor Share Across Sectors

2019 ◽  
pp. 1-37 ◽  
Author(s):  
Ivan Mendieta-Muñoz ◽  
Codrina Rada ◽  
Rudi von Arnim
Keyword(s):  
Labor Productivity ◽  
Real Wage ◽  
Structural Changes ◽  
Manufacturing Sector ◽  
Dominant Role ◽  
Early Period ◽  
Relative Prices ◽  
Labor Share ◽  
Us Economy ◽  
The Us

This paper provides novel insights on the changing functional distribution of income in the post– war US economy. We present a Divisia index decomposition of the US labor share (1948–2017) by fourteen sectors. The decomposition method furnishes exact contributions from four components towards aggregate changes of the labor share: sectoral real compensation, sectoral labor productivity, the structure of the economy as measured by employment shares, and the structure of markets as measured by relative prices. Results are presented for the entire period as well as the “golden age” (1948–1979) and a “neoliberal era” (1979–2017), painting a rich and detailed picture of structural changes in the US economy. The manufacturing sector plays a dominant role: despite its continuously falling employment share, growth of real compensation matches that of labor productivity in the early period but falls far behind during the neoliberal era. Further, employment shifts towards stagnant sectors with relatively low real wages and productivity. We discuss these results in the context of Baumol’s and Lewis’s seminal contributions on dual economies. While the cost disease is apparent—employment shifts towards stagnant sectors, their relative prices rise, and the aggregate growth rate (of productivity) decreases—the originally suggested mechanism of upward real wage convergence is muted. The observed changes are instead compatible with a “reverse-Lewis” shift, where stagnant sectors act as a labor surplus sink, and dynamic sector labor experiences slowing real wage growth.

Manufacturing in a High Cost Environment

2014 ◽  
pp. 393-480 ◽  
Author(s):  
Göran Roos
Keyword(s):  
Contemporary Literature ◽  
Operating Cost ◽  
Global Market ◽  
Manufacturing Firms ◽  
Value Chains ◽  
Policy Regime ◽  
The Us ◽  
The Individual ◽  
High Share ◽  
Very High

This chapter draws on an overview of contemporary literature to distil the best ways for manufacturing firms to adapt to and succeed in high cost environments. Parts of global value chains will move back to sophisticated, economically complex, high operating cost environments like the US and the European Manufacturing Belt. However, the firms that participate in these value chains will look different. The forces that impact the structure and location of manufacturing activities will also impact the individual firm, and this chapter discusses how this will result in successful firms becoming so called “Hidden Champions.” A successful transformation into tomorrow's Hidden Champion will result in fewer employees with higher capability, producing a higher level of output of which a very high share will be produced and delivered digitally. These firms will participate in smaller, more concentrated value chains serving a global market but operating both competitively and collaboratively in agglomerations like clusters. These agglomerations will be located in jurisdictions with high economic complexity and with a deep and broad industrial commons and with a supportive policy regime.

scholarly journals US Manufacturing: Understanding Its Past and Its Potential Future

2014 ◽  
Vol 28 (1) ◽  
pp. 3-26 ◽  
Author(s):  
Martin Neil Baily ◽  
Barry P. Bosworth
Keyword(s):  
United States ◽  
Manufacturing Sector ◽  
Value Added ◽  
Trade Deficit ◽  
The United States ◽  
Absolute Level ◽  
Total Employment ◽  
Future Evolution ◽  
Us Economy ◽  
The Us

The development of the US manufacturing sector over the last half-century displays two striking and somewhat contradictory features: 1) the growth of real output in the US manufacturing sector, measured by real value added, has equaled or exceeded that of total GDP, keeping the manufacturing share of the economy constant in price-adjusted terms; and 2) there is a long-standing decline in the share of total employment attributable to manufacturing. The persistence of these trends seems inconsistent with stories of a recent or sudden crisis in the US manufacturing sector. After all, as recently as 2010, the United States had the world's largest manufacturing sector measured by its valued-added, and while it has now been surpassed by China, the United States remains a very large manufacturer. On the other hand, there are some potential causes for concern. First, though manufacturing's output share of GDP has remained stable over 50 years, and manufacturing retains a reputation as a sector of rapid productivity improvements, this is largely due to the spectacular performance of one subsector of manufacturing: computers and electronics. Second, recently there has been a large drop in the absolute level of manufacturing employment that many find alarming. Third, the US manufacturing sector runs an enormous trade deficit, equaling $460 billion in 2012, which is also very concentrated in trade with Asia. Finally, we consider the future evolution of the manufacturing sector and its importance for the US economy. Many of the largest US corporations continue to shift their production facilities overseas. It is important to understand why the United States is not perceived to be an attractive base for their production.

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