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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: anthonym@utad.pt.
Sofia Gouveia
Affiliation:
Centre for Transdisciplinary Development Studies (CETRAD), University of Trás-os-Montes and Alto Douro (UTAD), Vila Real, Portugal; e-mail: sgouveia@utad.pt.
João Rebelo
Affiliation:
Centre for Transdisciplinary Development Studies (CETRAD), University of Trás-os-Montes and Alto Douro (UTAD), Vila Real, Portugal; e-mail: jrebelo@utad.pt.
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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

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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.

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