Artisanal or Just Half-Baked: Competing Collective Identities and Location Choice Among French Bakeries

Abstract

By conceptualizing similarity among firms in terms of overlapping resources, research on location choice has found that similar firms tend to locate far from one another. Yet, a resource-overlap perspective may not always align with decision-makers’ similarity classifications. In this article, we propose that new entrants also perceive firm similarities in terms of collective identities, and we examine how competition between collective identities influences entrants’ choice of location. Our arguments center on the distinction between unaffiliated traditionalists, actors who are loyal to values and practices originally associated with a label and who emphasize autonomy, and affiliated modernists, actors who reinterpret a label using different values and practices and who seek consistency. Analyzing the entry of 177 artisan bakers within the city of Lyon from 1998 to 2017, we find that new entrants locate where prior actors with similar collective identities had located previously. To differentiate through competition, however, some new entrants also tend to prefer locations closer to actors who are encroaching on their collective identity, most evident among traditionalists choosing to locate near modernists. By integrating a collective-identity perspective with location choice, we show how the sociocognitive basis of similarity classification shapes new entrants’ competitive behavior.