Organizational Form and Performance: Evidence from the Hotel Industry

Renáta Kosová; Francine Lafontaine; Rozenn Perrigot

doi:10.1162/rest_a_00330

Organizational Form and Performance: Evidence from the Hotel Industry

Renáta Kosová¹; Francine Lafontaine²; Rozenn Perrigot³

¹ Cornell University · ² University of Michigan · ³ Graduate School of Management, University of Rennes 1 and ESC Rennes

The Review of Economics and Statistics 2013

Abstract We use a unique proprietary panel data set from a large hotel company to study how organizational form affects hotel pricing and performance. Aggregate data patterns suggest sizable performance differences between franchised and company-operated hotels. However, after controlling for other factors, we find that if significant at all, such differences are economically small. Moreover, once we endogenize the choice of organizational form, the differences become insignificant. We conclude that the company chooses which hotels to franchise and operate corporately such that, conditional on hotel and market characteristics, it obtains consistent outcomes across organizational forms.

DOI: 10.1162/rest_a_00330
Volume: 95 (4)
Pages: 1303-1323
Language: en
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