Agris on-line Papers in Economics and Informatics

Faculty of Economics and Management CULS Prague, Kamýcká 129, 165 00 Praha - Suchdol

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The Role of Culture, Language and Trade Agreements in Global Wine Trade

Jeremiás Máté Balogh, Attila Jámbor

DOI: 10.7160/aol.2018.100302

Agris on-line Papers in Economics and Informatics, No 3 /2018, September

pp. 17-29

Balogh, J. M. and Jámbor, A. (2018) “The Role of Culture, Language and Trade Agreements in Global Wine Trade", AGRIS on-line Papers in Economics and Informatics, Vol. 10, No. 3, pp. 17-29. ISSN 1804-1930.DOI 10.7160/aol.2018.100302.

Abstract

In the progressively globalising world, wine trade is changing shape. In recent decades, major wine producers have suffered a remarkable drop in their domestic wine consumption, while New World wine producers have increased their production potential and induced new demand in foreign markets. These changes have been accompanied by a geographical relocation of wine consumption and trade. The aim of our paper is to analyse the effect of cultural-geographical proximity, free trade and the role of linguistic similarity on bilateral wine trade in the world major wine producer countries, employing balanced panel gravity model. Regression results suggest that larger countries export more wine, while transport costs increase in line with geographical distance, especially for landlocked trading partners. Moreover, global wine export costs are lower if trading partners are culturally similar; have the same religion or both are members of the WTO or have regional trade agreements.

Keywords

Wine trade, cultural proximity, language clusters, gravity model.

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