Agglomeration of fast food companies in Brazil

Abstract

PurposeThis study aims to understand how the institutional and populational characteristics of a Brazilian city, that is, size, gross domestic product (GDP), life expectancy, education, violence and amount of workers benefiting from PAT (Workers’ Food Program) bias the agglomeration of fast-food companies.Design/methodology/approachThe research involved 7,653 units distributed among 270 brands of fast-food chains (9 foreign and 261 Brazilian) operating in 542 Brazilian cities in 2015 and institutional and populational characteristics information about them. It calculated the Herfindahl index and implemented mixed inflated beta models.FindingsThe study found out that the agglomeration of establishments is mainly associated with the city’s income per capita, education, GDP and with some differences regarding the origin of the company, Brazilian or foreign.Research limitations/implicationsThe limitations of the study are the availability of Brazilian cities' data and information about the fast-food companies, such as governance-related information and general infrastructure. The study was cross-sectional, which does not analyze the business installation speed.Practical implicationsThis work provides data collection and analyzes which factors may contribute to the knowledge of the Brazilian fast-food market. It stands out that foreign companies do not seem to contemplate city violence. The proposed models can serve as an investors’ foundation to start, expand business and predict the number of establishments in a city.Originality/valueThe study highlights the relation between the cities’ institutional and populational characteristics and the aggregation of fast-food chains in Brazilian cities, using index commonly applied in industrial agglomeration.