Organizational choices and performance in distribution systems

This article studies the performance of distribution networks as the result of a range of organizational choices. The analytical part of the article surveys the vast literature devoted to franchising and dual distribution. From this framework, several testable propositions linking network performance to organizational choices are derived. Three complementary criteria of performance are taken into account: the internationalization rate, the expansion rate and the market share. This article provides evidence for the simultaneity between these performance criteria, analytically related as indicators of the network commercial performance. Thus, the econometrical model is defined as a system of simultaneous equations, free of endogeneity regarding the explanatory variables. The estimations on recent French data obtained using the three-stage least squares method provide robust results and show that the type of distribution network, the number of company-owned outlets in the network, the type of sector and the choice to manage several networks simultaneously affect the performance.