To cluster or not to cluster? Spatial determinants of closures in the American craft brewing industry

Abstract

As the American craft brewing industry matures, closures are becoming more prevalent. This paper studies the geographic patterns of and locational factors associated with craft brewery closures in three US cities with particular focus on the role of clustering on firm mortality. While the proximity of other breweries is not statistically significant in explaining brewery mortality, closures appear to occur outside of known clusters and in more residential areas outside of downtown districts. This study contributes to the literature on the relationship between clustering and firm failure rates as well as the debate regarding land use regulations surrounding craft breweries.