The repeal of prohibition and the resurgence of the national breweries

Abstract

Purpose This paper, applies the concept of path creation to a historical case. Path creation arose in part as a response to perceived weaknesses regarding the limited role of firm agency in the path dependency literature. Design/methodology/approach This essay uses the path creation methodology to explain why and how specific features of the American brewing industry's regulatory framework were devised during prohibition (1920‐1933) and implemented upon the repeal of prohibition in 1933. The study draws upon a series of primary sources, including firm publications and government reports. Findings It shows that path creation is a useful way to examine the design and implementation of industry‐level regulatory systems. It argues that rather than passively waiting and hoping for a beneficial set of rules, the largest national breweries in America actively set about to shape the regulatory environment in which they and their competitors operated. Originality/value The study is valuable on two levels. First, it helps explicate how and why the brewing industry's current regulatory system emerged. Second, and more broadly, it shows how the path creation thesis can be usefully adopted to interpret firm and managerial actions across time periods and industries.