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Determinants of degree of internationalization for U.S. restaurant firms

by: Kyung-A Sun, Seoki Lee
International Journal of Hospitality Management (December 2012), doi:10.1016/j.ijhm.2012.11.006  Key: citeulike:11920479

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Abstract

Internationalization has been an important strategy for many restaurants, and decisionmaking process to internationalize is complicated. This study includes a firm's financial performance, degree of franchising, and restaurant-type as factors to influence a restaurant's expansion into international markets. The generalized least squares (GLS) random-effect model was employed to examine the relationships including publicly traded U.S. restaurants during 1990–2010. The findings suggest a curvilinear, inverted, U-shape relationship between the industry-relative Tobin's q and the degree of internationalization (DOI), and a positive impact of franchising on the DOI. Regarding restaurant-type, compared to the mix-type restaurants, full-service restaurants are less likely to expand operations to international markets. Based on the results, this study provides theoretical and practical implications and suggestions for future research.


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