Status exploitation: opportunity costs and dilution concerns in the Italian wine industry

It is well recognized that organizations attain “status” or prestige by affiliating with notable partners or institutions, and that there are clear benefits to high status positions. However, are there organizational limits to status exploitation? Whether status leads to firm expansion hinges upon if the benefits derived from status offset the costs. In this paper we estimate a model that distinguishes between benefits and costs associated with new product introductions. To address this issue we examine new product introductions in the Italian Wine industry between 2003-2009. Our results suggest that status may affect whether firms select to introduce new products.