Hostname: page-component-cd9895bd7-7cvxr Total loading time: 0 Render date: 2024-12-18T14:09:10.645Z Has data issue: false hasContentIssue false
  • English
  • Français

Horizontal Differentiation and Determinants of Wine Exports: Evidence from Portugal

Published online by Cambridge University Press:  12 November 2019

Anthony Macedo ,
Sofia Gouveia  and
João Rebelo
Anthony Macedo
Affiliation:
Centre for Transdisciplinary Development Studies (CETRAD), University of Trás-os-Montes and Alto Douro (UTAD), Vila Real, Portugal; e-mail: [email protected].
Sofia Gouveia
Affiliation:
Centre for Transdisciplinary Development Studies (CETRAD), University of Trás-os-Montes and Alto Douro (UTAD), Vila Real, Portugal; e-mail: [email protected].
João Rebelo
Affiliation:
Centre for Transdisciplinary Development Studies (CETRAD), University of Trás-os-Montes and Alto Douro (UTAD), Vila Real, Portugal; e-mail: [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

Assuming horizontal differentiation and using an expanded gravity model, the main objective of this article is to assess the determinants of Portuguese wine exports. Horizontal differentiation is considered, with still and fortified wines being distinguished, as well as three distinct designations of origin: Vinho Verde, Douro, and Port wines. The results from the period between 2006 and 2016 suggest that wineries and private and public agencies should focus their commercial and policy efforts on countries with high purchasing power and/or with great potential for growth, regardless of whether the customs costs are higher. Moreover, it is concluded that horizontal differentiation influences the export determinants, suggesting there should exist different internationalization strategies for distinct types of wine. (JEL Classifications: F10, F14, L66)

Keywords

gravity modelinternational tradePoisson pseudo-maximum likelihood
Type
Articles
Information
Journal of Wine Economics , Volume 15 , Special Issue 2: Wine, Macroeconomics, and Finance , May 2020 , pp. 163 - 180
Copyright
Copyright © American Association of Wine Economists 2019

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

This work was supported by the project NORTE -01-0145-FEDER-000038 (INNOVINE & WINE – Innovation Platform of Vine & Wine) and national funds, through the FCT – Portuguese Foundation for Science and Technology under the project UID/SOC/04011/2019. We thank the editor, Karl Storchmann, and two anonymous referees for their insightful comments and suggestions. The article has also benefited from discussions with participants at the INFER-INSEEC-AAWE-LAREFI Workshop on Wine Macroeconomics and Finance. The usual disclaimer applies.

References

Anderson, J. E. (1979). A theoretical foundation for the gravity equation. American Economic Review, 69(1), 106–116.Google Scholar
Anderson, K. (2013). Is Georgia the next “new” wine-exporting country? Journal of Wine Economics, 8(1), 1–28.CrossRefGoogle Scholar
Anderson, J. E., and van Wincoop, E. (2003). Gravity with gravitas: A solution to the border puzzle. American Economic Review, 93(1), 170–192.CrossRefGoogle Scholar
Anderson, K., and Wittwer, G. (2017). U.K. and global wine markets by 2025, and implications of Brexit. Journal of Wine Economics, 12(3), 221–251.CrossRefGoogle Scholar
Ayuda, M. I., Ferrer-Perez, H., and Pinilla, V. (2019). A leader in an emerging new international market: The determinants of French wine exports, 1848–1938. Economic History Review (forthcoming).Google Scholar
Banks, G., and Overton, J. (2010). Old world, new world, third world? Reconceptualising the worlds of wine. Journal of Wine Research, 21(1), 57–75.CrossRefGoogle Scholar
Bayar, G. (2017). Estimating export equations: A survey of the literature. Empirical Economics, 54(2), 629–672.CrossRefGoogle Scholar
Bergstrand, J. H. (1989). The generalized gravity equation, monopolistic competition, and factor proportions theory in international trade. Review of Economics and Statistics, 71(1), 143–153.CrossRefGoogle Scholar
Cardebat, J. M., and Figuet, J. M. (2019). The impact of exchange rates on French wine exports. Journal of Wine Economics, 14(1), 71–89.CrossRefGoogle Scholar
Cardebat, J. M., and Livat, F. (2016). Wine experts’ rating: A matter of taste? International Journal of Wine Business Research, 28(1), 43–58.CrossRefGoogle Scholar
Castillo, J. S., Villanueva, E. C., and García-Cortijo, M. C. (2016). The international wine trade and its new export dynamics (1988–2012): A gravity model approach. Agribusiness, 32(4), 466–481.CrossRefGoogle Scholar
Costanigro, M., McCluskey, J. J., and Mittelhammer, R. C. (2007). Segmenting the wine market based on price: Hedonic regression when different prices mean different products. Journal of Agricultural Economics, 58(3), 454–466.CrossRefGoogle Scholar
Dal Bianco, A., Boatto, V. L., Caracciolo, F., and Santeramo, F. G. (2016). Tariffs and non-tariff frictions in the world wine trade. European Review of Agricultural Economics, 43(1), 31–57.CrossRefGoogle Scholar
Dal Bianco, A., Estrella-Orrego, M. J., Boatto, V. L., and Gennari, A. J. (2017). Is Mercosur promoting trade? Insights from Argentinean wine exports. Spanish Journal of Agricultural Research, 15(1), e0108. Available from http://revistas.inia.es/index.php/sjar/article/view/9270/3303.CrossRefGoogle Scholar
Dascal, D., Mattas, K., and Tzouvelekas, V. (2002). An analysis of EU wine trade: A gravity model approach. International Advances in Economic Research, 8(2), 135–147.CrossRefGoogle Scholar
Eaton, J., and Kortum, S. (2002). Technology, geography, and trade. Econometrica, 70(5), 1741–1779.CrossRefGoogle Scholar
Gergaud, O., and Ginsburgh, V. (2010). Natural endowments, production technologies and the quality of wines in Bordeaux. Does terroir matter? Journal of Wine Economics, 5(1), 3–21.CrossRefGoogle Scholar
Gouveia, S., Rebelo, J., and Lourenço-Gomes, L. (2018). Port wine exports: A gravity model approach. International Journal of Wine Business Research, 30(2), 218–242.CrossRefGoogle Scholar
Heckman, J. J. (1979). Sample selection bias as a specification error. Econometrica, 47(1), 153–161.CrossRefGoogle Scholar
Helpman, E. (1987). Imperfect competition and international trade: Evidence from fourteen industrial countries. Journal of the Japanese and International Economies, 1(1), 62–81.CrossRefGoogle Scholar
Helpman, E., and Krugman, P. R. (1985). Market Structure and Foreign Trade; Increasing Returns, Imperfect Competition and the International Economy. Cambridge: MIT Press.Google Scholar
Helpman, E., Melitz, M., and Rubinstein, Y. (2008). Estimating trade flows: Trading partners and trading volumes. Quarterly Journal of Economics, 123(2), 441–487.CrossRefGoogle Scholar
Holmes, A. J., and Anderson, K. (2017). Convergence in national alcohol consumption patterns: New global indicators. Journal of Wine Economics, 12(2), 117–148.CrossRefGoogle Scholar
Livat, F., Alston, J. M., and Cardebat, J. M. (2019). Do denominations of origin provide useful quality signals? The case of Bordeaux wines. Economic Modelling, 81, 518–532.CrossRefGoogle Scholar
Mariani, A., Napoletano, F., Vecchio, R., and Pomarici, E. (2014). European wine exports: The key role of trade policy. EuroChoices, 13(3), 46–53.CrossRefGoogle Scholar
Nazlioğlu, S. (2013). Exchange rate volatility and Turkish industry-level export: Panel cointegration analysis. Journal of International Trade and Economic Development, 22(7), 1088–1107.CrossRefGoogle Scholar
Olper, A., Curzi, D., Frisio, D. G., and Raimondi, V. (2012). Home bias in consumption: A comparison between wine and beer. German Journal of Agricultural Economics, 61(4), 223–234.Google Scholar
Outreville, J. F. (2016). Foreign affiliates of the multinational firms in the wine and spirits industry: Location-specific advantages and cultural distance. International Journal of Economics and Business Research, 12(4), 274–294.CrossRefGoogle Scholar
Pokharel, S. B. (2018). Wine industry campaign contributions and wine excise taxes: Evidence from U.S. states. Journal of Wine Economics, 13(1), 3–19.CrossRefGoogle Scholar
Pöyhönen, P. (1963). A tentative model for the volume of trade between countries. Review of World Economics, 90, 91–113.Google Scholar
Rebelo, J., Gouveia, S., Lourenço-Gomes, L., and Marta-Costa, A. A. (2018). Wine firm's size and economic performance: Evidence from traditional Portuguese wine regions. In Jordão, A. M. and Cosme, F. (eds.), Grapes and Wines: Advances in Production, Processing, Analysis and Valorization, 307–323. London, UK: IntechOpen.Google Scholar
Román, V., Bengoa, M., and Sánchez-Robles, B. (2016). Foreign direct investment, trade integration and the home bias: Evidence from the European Union. Empirical Economics, 50(1), 197–229.CrossRefGoogle Scholar
Silva, J. S., and Tenreyro, S. (2006). The log of gravity. Review of Economics and Statistics, 88, 641–658.CrossRefGoogle Scholar
Tinbergen, J. (1962). Shaping the World Economy: Suggestions for an International Economic Policy. New York, NY: Twentieth Century Fund.Google Scholar