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Normative and Resource Flow Consequences of Local Regulations in the American Brewing Industry, 1845-1918

James B. Wade, Anand Swaminathan and Michael Scott Saxon
Administrative Science Quarterly
Vol. 43, No. 4 (Dec., 1998), pp. 905-935
DOI: 10.2307/2393620
Stable URL: http://www.jstor.org/stable/2393620
Page Count: 31
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Normative and Resource Flow Consequences of Local Regulations in the American Brewing Industry, 1845-1918
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Abstract

In this study, we investigate the impact of state-level prohibitions on the founding and mortality rates of breweries in prohibition-free states. Our results suggest that particularistic institutional action such as nonuniform government regulation creates externalities of two kinds. First, it creates resource flow opportunities for organizations that are not directly affected by such action. Second, it imposes indirect coercive pressures by influencing cultural norms in the environment of organizations that are not directly affected by the regulations. The overall direction and strength of these effects vary with the centrality of organizations in terms of their location, the time elapsed since an environmental change, and organizational age. We discuss the implications of our findings for organization theory, particularly the relationship between social movements and institutional action, the effects of institutional action on industry structure, and the linkage between environmental change, organizational age, and organizational mortality.

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