Hostname: page-component-cd9895bd7-q99xh Total loading time: 0 Render date: 2024-12-29T02:43:39.568Z Has data issue: false hasContentIssue false
  • English
  • Français

The Changing Size Distribution of California's North Coast Wineries*

Published online by Cambridge University Press:  27 February 2014

Don Cyr ,
Joseph Kushner  and
Tomson Ogwang
Don Cyr*
Affiliation:
Goodman School of Business, Brock University, St. Catharines, Ontario L2S 3A1, Canada; Tel.: 905-688-5550, ext. 3136
Joseph Kushner*
Affiliation:
Department of Economics, Brock University, St. Catharines, Ontario L2S 3A1, Canada; Tel.: 905-688-5550, ext. 3165
Tomson Ogwang*
Affiliation:
Department of Economics, Brock University, St. Catharines, Ontario L2S 3A1, Canada; Tel.: 905-688-5550, ext. 4696
*
(corresponding author). e-mail: dcyr@brocku.ca
e-mail: kushner@brocku.ca.
e-mail: togwang@brocku.ca.
Get access Rights & Permissions [Opens in a new window]

Abstract

In this paper, we use three different goodness-of-fit tests for log-normality in conjunction with kernel nonparametric density estimation methods to examine both the size distribution of California North Coast wineries over time and by age. Our kernel density estimates indicate that the size distribution of wineries has changed from positively skewed to bimodal. These results are inconsistent with those in other industries, but are consistent with recent empirical research in the wine industry, which finds that smaller firms are comprising a larger component of market share. In terms of the distribution of firm size by age, our results indicate that as wineries age, the size distribution of firms becomes less skewed and more bimodal, which is also inconsistent with the research on other industries which finds that as firms age, the size distribution becomes more normal. Our results indicate that unlike other industries, where entry is very difficult, small firms can enter the wine industry and survive. (JEL Classifications: L11, L22, L25)

Keywords

age size distributionfirm size distributionwineries
Type
Articles
Information
Journal of Wine Economics , Volume 9 , Issue 1 , May 2014 , pp. 51 - 61
Copyright
Copyright © American Association of Wine Economists 2014 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

*

The authors thank the editor, Karl Storchmann, Lester Kwong, and an anonymous reviewer for their helpful comments and Kate Biggs and Tingting Liu for their data assistance.

References

Angelini, P., and Generale, A. (2008). On the evolution of firm size distributions. American Economic Review, 98(1), 426–438.Google Scholar
Bertinelli, L., Cardi, O., Pamukçu, T., and Strobl, E. (2006). The evolution of the distribution of plant size: Evidence from Luxemburg. Small Business Economics, 27(4), 301–311.Google Scholar
Cabral, L. M. B., and Mata, J. (2003). On the evolution of firm size distribution: facts and theory. American Economic Review, 93(4), 1075–1090.Google Scholar
Caputo, T. (2007). Wineries within wineries, larger producers think small to boost quality of reserve-level wines. Wines & Vines, 88, 24–27.Google Scholar
Cefis, E., Marsili, O., and Schenk, H. (2009). The effects of mergers and acquisitions on the firm size distribution. Journal of Evolutionary Economics, 19, 1–20.Google Scholar
Cirillo, P. (2009). Some evidence about the evolution of the size distribution of Italian firms by age. Economics Bulletin, 29(3), 1723–1730.Google Scholar
Coad, A. (2009). The Growth of Firms: A Survey of Theories and Empirical Evidence. Cheltenham, UK: Edward Elgar.Google Scholar
Coad, A. (2010). The exponential age distribution and the Pareto firm size distribution. Journal of Industry, Competition and Trade, 10(3–4), 389–395.Google Scholar
Cooley, T. F., and Quadrini, V. (2001). Financial markets and firm dynamics. American Economic Review, 91(5), 1286–1310.Google Scholar
Cyr, D., Kushner, J., and Ogwang, T. (2010). A survivor analysis of the Canadian wine industry: 1984–2009. Paper presented at the American Association of Wine Economists 2010 Annual Conference, Davis, California, June 25.Google Scholar
Cyr, D., Kushner, J., and Ogwang, T. (2012). The size distribution of California's North Coast wineries: 1984–2009. International Journal of Wine Business Research, 24(1), 6–18.CrossRefGoogle Scholar
Das, S. (1995). Size, age and firm growth in an infant industry: The computer hardware industry in India. International Journal of Industrial Organization, 13(1), 111–126.Google Scholar
Folwell, R.J., and Volanti, M. (2003). The changing market structure of the USA wine industry. Journal of Wine Research, 14(1), 25–30.Google Scholar
Gibrat, R. (1931). Les inégalités économiques. Paris: Recueil Sirey.Google Scholar
Hutchinson, J., Konings, J., and Walsh, P.P. (2010). The firm size distribution and inter-industry diversification. Review of Industrial Organization, 37, 65–82.Google Scholar
Oliveira, B., and Fortunato, A. (2006). Firm growth and liquidity constraints: A dynamic analysis. Small Business Economics, 27(2–3), 139–156.Google Scholar
Roberts, P. W., Klepper, S., and Hayward, S. (2011). Founder backgrounds and the evolution of firm size. Industrial and Corporate Change, 20(6), 1515–1538.Google Scholar
Schmalensee, R.L. (1989). Inter-industry studies of structure and performance. In Schmalensee, R. and Willig, R.D. (Eds.), Handbook of Industrial Organization, Vol. II. Amsterdam: North-Holland, 951–1009.Google Scholar
Silverman, B.W. (1986). Density Estimation for Statistics and Data Analysis. London: Chapman and Hall.Google Scholar
Tremblay, V.J., and Tremblay, C.H. (2012). New Perspectives on Industrial Organization: With Contributions from Behavioural Economics and Game Theory. New York: Springer.Google Scholar
U.S. Small Business Administration, Washington, DC. (www.sba.gov).Google Scholar
Yang, N., McCluskey, J., and Brady, M.P. (2012). The value of good neighbors: A spatial analysis of the California and Washington State wine industries. Land Economics, 88(4), 674–684.Google Scholar