Location competition and the strategic complementarity of operating hours: An empirical analysis

Abstract

This study conducts an empirical analysis of complementary opening hour choices and location competition through a probit regression analysis using panel data for family restaurants in Kyushu. This study revealed: (i) the more (less) other restaurants of the same brand within their trade areas operate 24 hours, the more (less) the restaurants tend to operate 24 hours and (ii) the more other brands’ restaurants are located within the areas, the more they tend to operate 24 hours. The mechanism of (i) may be explained by the effect of learning or coordination by the franchiser.