Value Creation in Tradition-led Industries: The Role of Innovative Practices. The Empirical Evidence from the Italian Wine Industry

This is the authors' abstract. We don't add key points for this paper.

In this study, we investigate whether firms create value in a tradition-led setting, through innovative efforts. Prior research has observed that in such a setting some actors opt for a creative representation of established products (i.e., a song, an opera, a piece of art, a fashion item, and so on); in contrast, others rely on a more traditional interpretation of the same products. Less investigated, to date, has been whether the decision to opt for an innovative behavior in a tradition-led context leads to value creation, or not. To this end, we conducted research in the Italian wine industry between 1999 and 2009 to investigate whether adopting innovative practices (i.e., aging wine in barrique), led to value creation and what other occurrences intervened in the value creation dynamic. Our findings suggest that innovation sustains value creation and that, in a tradition-led context, a firm's portfolio breadth negatively moderates the above relationship.