We study the effect of organizational choice and institutions on the performance of Spanish car dealerships. Using outlet-level data from 1994, we find that vertically-integrated dealerships showed substantially lower labor productivity, higher labor costs and lower profitability than franchised...

This article provides evidence on the determinants of the ongoing variable payments used in Portuguese and Spanish franchise systems. Consistent with the Two-Sided Moral Hazard Model, the ongoing variable payments decrease as the costs of monitoring franchisees' efforts rise. The results also...