The determinants of dealership structure: Empirical analysis of the Chinese auto market

Xiao, J; Ju, H

The determinants of dealership structure: Empirical analysis of the Chinese auto market

Xiao, J

Ju, H

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Publisher:: ACADEMIC PRESS INC ELSEVIER SCIENCE
Publication Type:: Journal Article
Citation:: Journal of Comparative Economics, 2016, 44, (4), pp. 961-981
Issue Date:: 2016-11-01

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Field	Value	Language
dc.contributor.author	Xiao, J https://orcid.org/0000-0003-3979-9828
dc.contributor.author	Ju, H
dc.date.accessioned	2022-08-21T05:10:43Z
dc.date.available	2022-08-21T05:10:43Z
dc.date.issued	2016-11-01
dc.identifier.citation	Journal of Comparative Economics, 2016, 44, (4), pp. 961-981
dc.identifier.issn	0147-5967
dc.identifier.issn	1095-7227
dc.identifier.uri	http://hdl.handle.net/10453/160593
dc.description.abstract	This paper investigates the factors that affect manufacturers’ decisions to grant local monopoly to a dealer and the factors that determine the dealer's status of sole dealership in the Chinese automobile market. Our empirical findings suggest that manufacturer decisions depend on dealers’ retail network: manufacturers are inclined to choose a sole dealer for their brands if that dealer also has retail outlets for substitute brands in the local market and to choose multiple dealers otherwise. These findings can be explained by the theory proposed by [Mathewson, G. F., Winter, R. A., 1994. Territorial restrictions in franchise contracts. Economic Inquiry 32 (2), 181–192.], who suggest that manufacturers transfer the exclusive right of resale from themselves to dealers only if dealers’ contribution is crucial to the vertical relationship. When dealers also have extensive retail channels for other brands, their retail efforts and experience become crucial to brand success, and thus manufacturers are more likely to offer them sole resale rights. Moreover, our empirical findings suggest that manufacturers also consider product quality and market conditions when making their decisions.
dc.language	English
dc.publisher	ACADEMIC PRESS INC ELSEVIER SCIENCE
dc.relation.ispartof	Journal of Comparative Economics
dc.relation.isbasedon	10.1016/j.jce.2016.04.001
dc.rights	info:eu-repo/semantics/closedAccess
dc.subject	1402 Applied Economics, 1499 Other Economics
dc.subject.classification	Economics
dc.title	The determinants of dealership structure: Empirical analysis of the Chinese auto market
dc.type	Journal Article
utslib.citation.volume	44
utslib.for	1402 Applied Economics
utslib.for	1499 Other Economics
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Economics Discipline
utslib.copyright.status	closed_access	*
dc.date.updated	2022-08-21T05:10:42Z
pubs.issue	4
pubs.publication-status	Published
pubs.volume	44
utslib.citation.issue	4

Abstract:

This paper investigates the factors that affect manufacturers’ decisions to grant local monopoly to a dealer and the factors that determine the dealer's status of sole dealership in the Chinese automobile market. Our empirical findings suggest that manufacturer decisions depend on dealers’ retail network: manufacturers are inclined to choose a sole dealer for their brands if that dealer also has retail outlets for substitute brands in the local market and to choose multiple dealers otherwise. These findings can be explained by the theory proposed by [Mathewson, G. F., Winter, R. A., 1994. Territorial restrictions in franchise contracts. Economic Inquiry 32 (2), 181–192.], who suggest that manufacturers transfer the exclusive right of resale from themselves to dealers only if dealers’ contribution is crucial to the vertical relationship. When dealers also have extensive retail channels for other brands, their retail efforts and experience become crucial to brand success, and thus manufacturers are more likely to offer them sole resale rights. Moreover, our empirical findings suggest that manufacturers also consider product quality and market conditions when making their decisions.

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http://hdl.handle.net/10453/160593