Industry evolution, resilience and regional embeddedness: the case of the Danish microbrewing industry

Excess capacity and increased competition in the Danish microbrewing industry have created a burgeoning shakeout, which has been accelerated by the Covid-19 crisis. We discuss which types of firms are likely to survive this, specifically, to what extent such firms use regional embeddedness as a survival strategy. Using three different types of data, we demonstrate that firms' regional and local embeddedness is widely used to shelter them from competition pressures. Moreover, the passion among owners and investors for the sector (and its products) alters the purely economic rationality that generally, according to theoretical predictions, determines whether firms survive industry shakeout.

Automated summary

Excess capacity and increased competition in the Danish microbrewing industry have led to a booming shakeout, which has been further accelerated by the Covid-19 crisis. This paper discusses the types of firms that are likely to survive and explores how they use regional embeddedness as a survival strategy.