The first-stage sample selection mo

The first-stage sample selection model (see Equation 1) includes all cases of franchisor-franchisee htigation observed for all 75 firms in our sample, each observed over multiple years. Although this initial sample comprised 1,133 obser- vations, missing data on franchisors' presence across multi- ple states and ownership structures resulted in 622 complete observations for the selection regression estimation.^ Con- ditioning on litigation incidence enables us not only to account for litigation selection but also to estimate the probability that either party may initiate litigation; whereas p represents the probability of the franchisor initiating liti- gation against a franchisee, (1 - p) denotes the likelihood of the franchisee initiating litigation against the franchisor.