Standing the test of time. Does firm performance improve with age? An analysis of the wine industry

Currently, few studies have investigated how longevity affects economic and financial performance. These studies have generally approached the issue according to theoretical perspectives; thus, even fewer empirical studies exist. The present work aims to fill this gap by empirically verifying whether longevity is a variable that can determine firm performance. Our main hypotheses are tested on a large sample of Italian wineries by applying a panel model with time fixed effects on firm performance measured from 2008 to 2011. Our main findings highlight that the oldest wineries outperform the youngest wineries and that the longevity factor can significantly explain the difference in performance. We also discuss some practical implications of our study and intriguing directions for future research.