The wine industry: corporate governance trends and intellectual capital returns

Purpose - One of the most common governance systems is the family business above all in industries with strong cultural traditions, such as the wine business, but the literature still disagrees on whether such a corporate structure increases performance. Our empirical survey aims to investigate the effect of a long term company culture in terms of a firm's economic performance and intellectual capital. Design/methodology/approach-Using a quantitative research approach, the survey tests a panel dataset of Italian wine companies, developing the statistical model of parametric correlation to verify the relationship between some performance indicators with a set of variables, such as the year of foundation of the company, as well as single aspects of corporate governance. Originality/value -This methodology results in a deep analysis of the wine business, which is one of the most stable industries in Italy. We found some industry-specific peculiarities. One is the family buy out strategy implemented recently by several wine companies. That feature, often moving the companies out of the family business, could also be threatening the terroir inspiration. Secondly, we found a large presence of cooperatives within the main Italian wine companies, which are non-family entities, but are made of several family firms working in joint cooperation (a mixed family/non-family governance model). Practical implications - The survey represents an empirical support to fill the limited empirical evidence existing on wine industry value creation in relation to the corporate governance structure. The research findings support the hypothesis that a family firm could add value over the generations through generating an internal cumulative knowledge process and a strong brand image. The main implications are that a family firm is an efficient governance model. In addition, the presence of a CEO external to the founder's family is positively correlated to performances, as well as a limited amount of board members.