In industries dominated by franchising as the dominant mode of entry there is a tendency that franchisors pursue different ownership strategies. We test ownership strategies of international franchisors using Dunning's 'envelope' Ownership, Location and Internalization (OLI) paradigm. The ownership choices of international franchisors' foreign market entry based on the strategic intent of exploitation and exploration are well explained by Dunning's 'envelope' OLI paradigm. Our results show that the dynamic L advantages (perceiving foreign locations as a source of learning), the static O advantages (nationality of the firm) and static L advantages (the role of foreign applicants) have a significant influence on the selection of foreign entry strategy by international franchisors.
Bibliographical noteFunding Information:
This research was partially funded by a grand from the Yonsei Management Research Centre, Yonsei University. The authors would like to thank the anonymous IBR reviewers for their helpful comments on earlier versions of the manuscript.
All Science Journal Classification (ASJC) codes
- Business and International Management