The best broths are cooked in the oldest pans: An empirical test of the practice-based view in the wine industry

Abstract

The practice-based view has recently been proposed as a counter to the resource-based view of the firm. Unlike the resource-based view, the practice-based view contends that performance differences among firms can accrue from readily available practices. Using a large sample of wines over a 20-year period, I find evidence of a significant relationship between the implementation of practices and performance. Findings also indicate that the strength of this relationship is contingent on the possession of valuable, rare, inimitable, and non-substitutable resources (a firm-level moderator) and the prevalence of practices (an industry-level moderator). The impact of practices on performance is less pronounced when firms possess valuable, rare, inimitable, and non-substitutable resources. It also declines as they become more widespread in an industry.