Islands of legitimacy: the effects of geographical heterogeneity on the entry, positioning and survival rates of Franconian breweries, 1989-2004

The present project is the continuation of the work performed under the current grant which explored the role of social expectations on the behaviour of Franconian breweries during the period 1989-2004. A striking deficiency of the existing literature is the limited attention dedicated by the extant literature to the role of cultures, habits and traditions in shaping audience preferences. Cultural conditions often vary considerably over geographical space and agglomerations and can accelerate preference formation and consensus around them. We enrich the current literature by taking the explicit audience members’ attitudes into account by falling back on a survey that we conducted. Herewith we want to capture the cultural conditions that vary across different geographical regions.

The goals at which the current project aims are as follows. First, we would like to dig deeper into the influence of geographical heterogeneity. Second, during our observation period more than 60 new breweries have been founded in Franconia, allowing the opportunity to explore the effect of geographical heterogeneity along authenticity also on organizational foundings. In particular we want to investigate two different research questions: Do foundings of new breweries happen more often in counties where there are many prototypical breweries or do founders rather choose to locate their businesses in places where prototypical breweries are not often to be found? If new entrants choose to locate their business in counties with a high density of prototypical organizations, do these new entrants try to differentiate themselves on the identity dimension? The richness of the qualitative and quantitative data collected so far appears well aligned with the three aims of this new project.

Many of the respondents that have been contacted in survey on producers have raised interest in the results of the study. We have agreed in presenting the most important results at a convention of the Franconian beer producers. This interest shows that the beer industry in itself might benefit from the insights of our research project as well: we have no doubts that the alleged importance of local connectedness, the spatial differences in audience expectations and the spatial differences in the consequences of compliance with these expectations (or the lack of it) will trigger of significant interest from members of the brewing industry. Our initial contacts with the expects of the field and the producers provide support to this conjecture.