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Brewing up entrepreneurship: government intervention in beer

Brewing up entrepreneurship: government intervention in beer PurposeWhile previous studies have looked at the negative consequences of beer drinking often as a prelude to discussing benefits of laws that curtail consumption, the purpose of this paper is to understand the downside of such regulations insofar as reducing entrepreneurial activity in the brewing industry.Design/methodology/approachUsing a unique data set from the Brewers’ Association that contains information on the number and type of brewery in each county, this study explores the relationship between the number of breweries and regulations targeted at the brewing industry. Zero-inflated negative binomial regressions are used to determine the relationship between the number of microbreweries and brewpubs per county and state beer taxes, self-distribution legislation, and on-premises sales.FindingsThe authors find that allowing breweries to sell beers on-premises as well as allowing for breweries to self-distribute have statistically significant relationships with the number of microbreweries, brewpubs, and breweries. The authors do not find an economically significant relationship between state excise taxes and the number of breweries of any type.Originality/valueResults suggest that whatever public health benefits are brought about by alcohol laws, they are not a free lunch, as they may hinder entrepreneurial development. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Entrepreneurship and Public Policy Emerald Publishing

Brewing up entrepreneurship: government intervention in beer

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
2045-2101
DOI
10.1108/JEPP-02-2016-0004
Publisher site
See Article on Publisher Site

Abstract

PurposeWhile previous studies have looked at the negative consequences of beer drinking often as a prelude to discussing benefits of laws that curtail consumption, the purpose of this paper is to understand the downside of such regulations insofar as reducing entrepreneurial activity in the brewing industry.Design/methodology/approachUsing a unique data set from the Brewers’ Association that contains information on the number and type of brewery in each county, this study explores the relationship between the number of breweries and regulations targeted at the brewing industry. Zero-inflated negative binomial regressions are used to determine the relationship between the number of microbreweries and brewpubs per county and state beer taxes, self-distribution legislation, and on-premises sales.FindingsThe authors find that allowing breweries to sell beers on-premises as well as allowing for breweries to self-distribute have statistically significant relationships with the number of microbreweries, brewpubs, and breweries. The authors do not find an economically significant relationship between state excise taxes and the number of breweries of any type.Originality/valueResults suggest that whatever public health benefits are brought about by alcohol laws, they are not a free lunch, as they may hinder entrepreneurial development.

Journal

Journal of Entrepreneurship and Public Policy – Emerald Publishing

Published: Nov 7, 2016

References

  • Implicit taxes collected by state liquor monopolies
  • ‘Bluewashing’ the firm? Voluntary regulations, program design, and member compliance with the United Nations global compact
  • US Brewing industry profitability: a simultaneous determination of structure, conduct, and performance
  • Economic freedom and entrepreneurial activity: some cross-country evidence
  • A spatial analysis of entrepreneurship and institutional quality: evidence from US Metropolitan areas