Entrepreneurship, Excise Taxes, and the “Flight to Quality”

Abstract

Research on entrepreneurial marketing is now fairly common, and macromarketing is an established field. However, studies that incorporate variables of interest to both entrepreneurial marketing and macromarketing scholars are scarce. In the spirit of the special issue, this study crosses disciplinary boundaries in order to investigate how a macro-level policy variable (i.e., excise taxes) affects a key marketing variable (i.e., product quality) in a sample of small firms (i.e., microbreweries). The results of the study support Barzel’s “flight to quality” hypothesis. We conclude that high excise taxes invite quality-based competition. Furthermore, entrepreneurial microbreweries appear to recognize the flight to quality, and they capitalize on the opportunity to bring relatively high quality products to market. Implications for entrepreneurial marketing researchers, macromarketing researchers, and public policy are discussed.