The Effects of Knowledge Spillovers and Vineyard Proximity on Winery Clustering
In this work with Haifeng Liao and Jon Miller, we investigate the agglomeration of wine-making firms. We study wineries in Washington State for two reasons. First, its relatively short history of wine-making made collecting data on the location of wine-making talent early in the industry's history relatively easy. Secondly, its geography is interesting. While most of the activity in the state is in a large cluster near prime viticultural areas in the Eastern half of the state, another cluster accounting for 30% of employment is near Seattle. We find that knowledge spillovers, measured indirectly as proximity to winemaking firms, are more important to the location of new wineries than is proximity to vineyards.