Quality Signal Impacts on Firm Level Production: Evidence from the Beer Industry

Mitch Kunce

Business & Entrepreneurship Journal, 2021, vol. 10, issue 1, 2

Abstract: The intuitive nature of signaling theory in part helps explain its pervasiveness. The usefulness of a signal depends on the extent to which the signal corresponds with the sought after quality of the signaler. Herein, we examine a singular quality signal from the beer industry-winning a coveted Great American Beer Festival (GABF) medal. To provide an assessment of the quantitative impact of winning a GABF medal, this paper exploits a unique and expansive unbalanced panel of time-series, cross-section data from 1989-2012. Firm specific production changes are merged with the GABF medal winner database. Results from a two-way fixed-effects specification finds no significant relationship between winning a GABF medal or medals and changes in a brewery's output. Interestingly, it appears that the GABF quality signal applies more to the brewer than the brewery. JEL classification numbers: D12, L81, M31.

Keywords: Quality signals; production; information asymmetry. (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spt:busent:v:10:y:2021:i:1:f:10_1_2

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