Hostname: page-component-cd9895bd7-fscjk Total loading time: 0 Render date: 2024-12-26T07:30:03.918Z Has data issue: false hasContentIssue false
  • English
  • Français

The Impact of Exchange Rates on French Wine Exports

Published online by Cambridge University Press:  07 May 2019

Jean-Marie Cardebat  and
Jean-Marc Figuet
Jean-Marie Cardebat
Affiliation:
LAREFI, Université de Bordeaux, Avenue Léon Duguit, 33608 Pessac, France; e-mail: jean-marie.cardebat@u-bordeaux.fr.
Jean-Marc Figuet
Affiliation:
LAREFI, Université de Bordeaux, Avenue Léon Duguit, 33608 Pessac, France; e-mail: jean-marc.figuet@u-bordeaux.fr.
Get access Rights & Permissions [Opens in a new window]

Abstract

In this article, we analyze the impact of varying exchange rates on French wine exports using a dynamic Armington panel model for the time period from 2000 to 2011. Our results suggest that French wines have become less competitive during the 2000s. This is due to two factors: rising domestic wine prices relative to foreign competitors and the appreciation of the euro against the USD and the GBP. Chinese demand appears to be a key driver of French wine exports. In addition, we find some compositional effects in Bordeaux wine exports. In response to the appreciation of the euro, the share of high-priced wines has increased, suggesting some degree of quality sorting in response to exchange-rate changes. (JEL Classification: F14, F31, Q17)

Keywords

exchange ratesFrench wine exportswine quality
Type
Articles
Information
Journal of Wine Economics , Volume 14 , Issue 1 , February 2019 , pp. 71 - 89
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

We thank an anonymous referee and the editor for their useful comments that greatly improved the quality of this article. We also would like to thank Alan Sichel, the President of the Bordeaux union of négociants and CEO of Maison Sichel, and Mathieu Chadronnier, the CEO of CVBG, for providing further insights into the Bordeaux wine trade.

References

Agreste. (2014). Rapport Annuel. Paris: Agreste.Google Scholar
Amable, B., and Verspagen, B. (1995). The role of technology in market shares dynamics. Applied Economics, 27(2), 197–204.Google Scholar
Anderson, K., and Wittwer, G. (2001). U.S. dollar appreciation and the spread of Pierce's disease: Effects on the world's wine markets. Australian and New Zealand Wine Industry Journal, 16(2), 70–75.Google Scholar
Anderson, K., and Wittwer, G. (2013). Modeling global wine markets to 2018: Exchange rates, taste changes, and China's import growth. Journal of Wine Economics, 8(2), 131–158.Google Scholar
Arellano, M., and Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Review of Economic Studies, 58(2), 277–297.Google Scholar
Armington, P. S. (1969). A theory of demand for products distinguished by place of production. Staff Papers International Monetary Fund, 16(1), 159–178.Google Scholar
Bastos, P., and Silva, J. (2010). The quality of a firm's exports: Where you export to matters. Journal of International Economics, 82(2), 99–111.Google Scholar
Bahmani-Oskooee, M., and Ardalani, Z. (2006). Exchange rate sensitivity of US trade flows: Evidence from industry data. Southern Economic Journal, 72(3), 542–559.Google Scholar
Chiappini, R. (2011). Comment mesurer la compétitivité structurelle des pays dans les équations d'exportation? L'Actualité économique-Revue d'analyse économique, 87(1), 31–57.Google Scholar
Chiappini, R. (2012). Offshoring and export performance in the European automotive industry. Competition and Change, 16(4), 323–342.Google Scholar
Chowdhury, A. R. (1993). Does exchange rate volatility depress trade flows? Evidence from error-correction models. The Review of Economics and Statistics, 75(4), 700–706.Google Scholar
Crozet, M., and Erkel-Rousse, H. (2004). Trade performances, product quality perceptions, and the estimation of trade price elasticities. Review of International Economics, 12(1), 108–129.Google Scholar
Crozet, M., Head, K., and Mayer, T. (2012). Quality sorting and trade: Firm-level evidence for French wine. Review of Economic Studies, 79(2), 609–644.Google Scholar
Dornbusch, R. (1987). Exchange rates and prices. American Economic Review, 77(1), 93–106.Google Scholar
Durkin, J., and Krygier, M. (2000). Differences in GDP per capita and the share of intraindustry trade: The role of vertically differentiated trade. Review of International Economics, 8(4), 760–774.Google Scholar
Eichengreen, B., and Gupta, P. (2013). The Real Exchange Rate and Export Growth. World Bank, Policy Research Working Paper No. 6629, September. Available from http://documents.worldbank.org/curated/en/670641468163465874/text/WPS6629.txt.Google Scholar
Fagerberg, J. (1988). International competitiveness. Economic Journal, 98(391), 355–374.Google Scholar
FEVS. (2014). Database. Paris: FEVS.Google Scholar
Goldstein, M., and Khan, M. S. (1985). Income and price effects in foreign trade. Handbook of International Economics, 2, 1041–1105.Google Scholar
Hallak, J. C. (2006). Product quality and the direction of trade. Journal of International Economics, 68(1), 238–265.Google Scholar
Hallak, J. C., and Schott, P. K. (2011). Estimating cross-country differences in product quality. Quarterly Journal of Economics, 126(1), 417–474.Google Scholar
Hummels, D., and Skiba, A. (2004). Shipping the good apples out? An empirical confirmation of the Alchian-Allen conjecture. Journal of Political Economy, 112(6), 1384–1402.Google Scholar
INAO. (2015). L'Appellation d'Origine Protégée. Paris: INAO.Google Scholar
INSEE. (2014). Caractéristiques comptables, financières et d'emploi des entreprises en 2013. Paris: INSEE.Google Scholar
Junz, B., and Rhomberg, R. (1973). Price competitiveness in export trade among industrial countries. American Economic Review, 63(2), 412–418.Google Scholar
Karelakis, C., Mattas, K., and Chryssochoidis, G. (2008). Greek wine firms: Determinants of export performance. Agribusiness, 24(2), 275–297.Google Scholar
Maurel, C. (2009). Determinants of export performance in French wine SMEs. International Journal of Wine Business Research, 21(2), 118–142.Google Scholar
Melitz, M. J. (2003). The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica, 71(6), 1695–1725.Google Scholar
OIV. (2013). Notes de Conjoncture Mondiale. Paris: OIV.Google Scholar
OIV. (2014). Statistical Report on World Vitiviniculture. Paris: OIV.Google Scholar
Robinson, P. A. (2009). Exchange rate pass-through to US import prices: Evidence from the wine market. Honors Thesis, Whitman College, Walla Walla, WA.Google Scholar
Silverman, M., Sengupta, S., and Castaldi, R. M. (2004). Improving export performance: The case of the US wine industry. Journal of Global Marketing, 17(1), 45–65.Google Scholar
Warner, D., and Kreinin, M. E. (1983). Determinants of international trade flows. Review of Economics and Statistics, 65(1), 96–104.Google Scholar