Entry, survival, and profits: The emergence of microbreweries in Denmark

Abstract

The first wave of entry into the Danish microbrew industry took place from the beginning of the millennium. The first movers had a high focus on finding a market niche and profit perspectives, whereas later entrants had relatively more focus on motives like making the perfect beer. A survey including 45 Danish microbreweries shows that the share of breweries established until 2004 with positive earnings does not seem to be higher than the share of breweries in later cohorts. Using information on all breweries that existed from 2009, a survival analysis using a censored regression model shows that survival is inversely related to the year of entry, suggesting that learning-by-doing effects may have been present especially for the first cohorts of entrants.