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Dynamics of Buyer-Seller Relations in Norwegian Wine Imports

Published online by Cambridge University Press:  10 December 2020

Ursula Landazuri-Tveteraas ,
Frank Asche  and
Hans-Martin Straume
Ursula Landazuri-Tveteraas
Affiliation:
Department of Safety, Economics and Planning, University of Stavanger, N-4036Stavanger, Norway; e-mail: [email protected].
Frank Asche
Affiliation:
Food Systems Institute and School of Forest Resources and Conservation, University of Florida, 1741 Museum Road, 183 Rogers Hall Gainesville, FL32611-057, USA and Department of Safety, Economics and Planning, University of Stavanger; e-mail: [email protected].
Hans-Martin Straume*
Affiliation:
Department of Economics, BI Norwegian Business School, P.O. Box 6233, N-5893Bergen, Norway
*
e-mail: [email protected] (corresponding author).
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Abstract

As for all traded products, aggregated wine imports build on numerous trades at the firm level. To ensure consumers access to a variety of wines with different qualities, importers need to connect to different wine exporters. Some of these relationships will last for a long time, while the duration of others may be short. In this article, we employ transaction-level data to analyze the duration of trade relationships in wine imports to Norway from 2004 to 2014. We find that most relationships are short-lived, as more than 75% of trade relationships end after less than two years. Furthermore, we find that higher-quality wines, as indicated by the import price, increase trade duration. Deeper firm-to-firm trade relationships for more exclusive wines are likely due to higher search costs for high-quality products. The results also show that the size of the initial trade between the partners, or degree of commitment, is a positive determinant for persistent relationships. (JEL Classifications: C41, F14, Q27)

Keywords

duration of tradetransaction datawine
Type
Articles
Information
Journal of Wine Economics , Volume 16 , Issue 1 , February 2021 , pp. 68 - 85
Copyright
Copyright © American Association of Wine Economists, 2020

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Footnotes

The authors are grateful for helpful comments from anonymous referees and financial support from the Research Council of Norway under Grant CT # 233836.

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