Determinants of International Beer Export

Eva BielekováJán Pokrivčák

DOI 10.7160/aol.2020.120202
No 2/2020, June
pp. 17-27

Bieleková, E. and Pokrivčák, J. (2020) “Determinants of International Beer Export", AGRIS on-line Papers in Economics and Informatics, Vol. 12, No. 2, pp. 17-27. ISSN 1804-1930. DOI 10.7160/aol.2020.120202.

Abstract

The aim of this paper was to identify factors influencing dynamics of international beer export. The Poisson pseudo maximum likelihood estimator was employed to estimate the export determinants of the biggest global beer exporters to 199 destinations between 2000 and 2017. We estimated that international beer export is positively influenced by gross domestic product of importing countries and cultural similarities. Trade between countries that share common borders, same language or colonial links has shown to be a very strong and positive determinant. We found a significant role of customs unions and signed free trade agreements; however, this result was not robust across all estimated models. Beer export is negatively affected by the distance between trading countries and their landlockedness, which confirms the relevance of transport cost in beer trade. Beer exports are declining with rise in population of importing countries, which signals an advantage in targeting countries with less differentiated beer supply.

Keywords

International trade, export analysis, gravity model, PPML, beer

References

  1. Albertin, G. (2008) “Trade Effects of Currency Unions: Do Economic Dissimilarities Matter?”, IMF working paper No. 08/249. [Online]. Available: https://papers.ssrn.com/sol3/papers. cfm?abstract_id=1316717 [Accessed: 3 June 2019].
  2. Anderson, J. E. (1979) “A theoretical foundation for the gravity equation”, The American Economic Review, Vol. 69, No. 1, pp. 106-116. E-ISSN 19447981.
  3. Ashley, M. J. and Rankin, J. G. (1988) “A public health approach to the prevention of alcohol-related health problems”, Annual Review Of Public Health, Vol. 9, pp. 233-271. DOI 10.1146/annurev.pu.09.050188.001313.
  4. Baldwin, R., Skudelny, F. and Taglioni, D. (2005) "Trade effects of the euro. Evidence from sectoral data”, Working paper No. 446. [Online]. Available: http://ssrn.com/abstract_id=668246 [Accessed: 3 June 2019].
  5. Balogh, J. M. (2015) “Investigating the effect of geographical distances and cultural proximity on the Hungarian wine trade”, Society and Economy, Vol. 37, No. 4, pp. 513-529. E-ISSN 1588-970X, ISSN 1588-9726.
  6. Berger, H. and Nitsch, V. (2008) “Zooming out: The trade effect of the euro in historical perspective”, Journal of International Money and Finance, Vol. 27, No. 8, pp. 1244-1260. ISSN 0261-5606. DOI 10.1016/j.jimonfin.2008.07.005.
  7. Bjelić, P. (2016) “Trade facilitation and non-tariff measures in beverages and auto-parts supply chains in CEFTA”, Technical Report, UN Conference on Trade and Development, Eschborn, Germany, 81 p. DOI 10.13140/RG.2.2.31972.78720.
  8. Bouët, A., Emlinger, C. and Lamani, V. (2017) “What determines exports of luxury products? The case of cognac”, Journal of Wine Economics, Vol. 12, No. 1, pp. 37-58. E-1931-437X, ISSN 1931-4361. DOI 10.1017/jwe.2017.2.
  9. Buch, C. M., Kleinert, J. and Toubal, F. (2004) "The distance puzzle: on the interpretation of the distance coefficient in gravity equations”, Economics Letters, Vol. 83, No. 3, pp. 293-298. ISSN 0165-1765. DOI 10.1016/j.econlet.2003.10.022.
  10. Burger, M. J., Linders, G-J. M. and van Oort, F. (2009) “On the specification of the gravity model of trade: zeros, excess zeros and zero-inflated estimation”, Spatial Economic Analysis, Vol. 4, No. 2, pp. 167-190. E-ISSN 1742-1780, ISSN 1742-1772. DOI 10.1080/17421770902834327.
  11. Costa-i-Font, J. (2010) “Regional single currency effects on bilateral trade with the European union“. LEQS paper No. 26/2010. [Online]. Available: https://papers.ssrn.com/sol3/papers.cfm?abstract_ id=1699805 [Accessed: 23 May 2019].
  12. Dal Bianco, A., Boatto, V. L., Caracciolo, F. and Santeramo, F. G. (2015) “Tariffs and non-tariff frictions in the world wine trade”, European Review of Agricultural Economics, Vol. 43, No. 1, pp. 31-57. ISSN 1464-3618, ISSN 0165-1587. DOI 10.1093/erae/jbv008.
  13. De Matteis, M. C., Tun-Hsiang, E. Y., Boyer, Ch. N. and DeLong, K. L. (2018) “Analyzing determinants of U.S. distillers dried grains with solubles exports”, Agribusiness, Vol. 35, No. 2, pp. 168-181. E-ISSN1520-6297. DOI 10.1002/agr.21575.
  14. Dreyer, H., Fedoseeva, S., Herrmann, R. (2017). “Gravity meets pricing to market: what a combined- method approach tells us on German beer exports and pricing”, Journal of economics and statistics, Vol. 237, No. 4, pp. 295-328. ISSN 2366-049X.
  15. Ekanayake, E. M., Mukherjee, A. and Veeramacheneni, B. (2010) “Trade blocks and the gravity model: A study of economic integration among Asian developing countries”, Journal of Economic Integration, Vol. 25, No. 4, pp. 627-643. E-ISSN 1976-5525.
  16. Fogarty, J. (2010) “The demand for beer, wine and spirits: A survey of the literature”, Journal of Economic Surveys, Vol. 24, No. 3, pp. 428-478. E-ISSN:1467-6419. DOI 10.1111/j.1467-6419.2009.00591.x.
  17. Giorgio, R. (2004) “Empirical evidence on the north-south trade flows: An augmented gravity model”, MPRA paper No. 1326. [Online]. Available: https://mpra.ub.uni-muenchen.de/1326/1/ MPRA_paper_1326.pdf [Accessed: 22 May 2019].
  18. Goméz-Corona, C., Escalona-Buendía, H. B., Garcia, M., Chollet, S. and Valentin, D. (2016) “Craft vs. industrial: Habits, attitudes and motivations towards beer consumption in Mexico”, Appetite, Vol. 96, pp. 358-367. ISSN 0195-6663. DOI 10.1016/j.appet.2015.10.002.
  19. Madsen, E. S. and Wu, Y. (2016) “Marketing and globalization of the brewing industry”, In Cabras, I., Higgins, D. and Preece, D. (eds) "Brewing, beer and pubs", London, Palgrave Macmillan, pp. 34-53. ISBN 978-1-137-46618-1. DOI 10.1057/9781137466181_3.
  20. Márquez-Ramos, L., Martínez-Zarzoso, I. and Suárez-Burguet, C. (2007) ”The role of distance in gravity regressions: is there really a missing globalisation puzzle?”, Journal of Economic Analysis and Policy, Vol. 7, No. 1. ISSN 1935-1682. DOI 10.2202/1935-1682.1557.
  21. McGowan, R. S. J. and Mahon, J. F. (2007) ”U.S. beer flows & the impact of NAFTA”, Management & Marketing, Vol. 5, No. 1, pp. 39-54. ISSN 2069-8887.
  22. Moulton, B. (1990) “An illustration of the pitfall in estimating the effects of aggregate variables on micro units”, Review of Economics And Statistics, Vol. 72, No. 2, pp. 334-338. E-ISSN 1530-9142. DOI 10.2307/2109724.
  23. 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, Vol. 61, No. 4, pp. 223-234. ISSN 2191-4028.
  24. Pinilla, V. and Serrano, R. (2008) “The agricultural and food trade in the first globalization: Spanish table wine exports 1871 to 1935 – A case study”, Journal of Wine Economics, Vol. 3, No. 2, p. 132-148. E-ISSN 1931-437X, ISSN 1931-4361. DOI 10.1017/S1931436100001176.
  25. Pokrivčák, J., van Berkum, S., Drgova, L., Mraz, M., Ciaian, pp. (2013). “The role of non-tariff measures in EU dairy trade with Russia”, Post-communist economies, Vol. 25, No. 2, pp. 175-189. DOI 10.1080/14631377.2013.787737.
  26. Pokrivčák, J., Lančarič, D., Savov, R. and Tóth, M. (2017) “Craft beer in Slovakia”, In Garavaglia, C., Swinnen, J. “Economic perspectives on craft beer: A revolution in the global beer industry”, Cham, Switzerland, Palgrave Macmillan. ISBN 978-3-319-58235-1. DOI 10.1007/978-3-319-58235-1_12.
  27. Pokrivčák, J., Supeková, S. C., Lančarič, D., Savov, R., Tóth, M. and Vašina, R. (2019) “Development of beer industry and craft beer expansion”, Journal of Food and Nutrition Research, Vol. 58, No. 1, pp. 63-74. ISSN 1338-4260.
  28. Ramsey, J. B. (1969) “Tests for specification errors in classical linear least squares regression analysis”, Journal of royal statistical society, Vol. 31, No. 2, pp. 350-371. E-ISSN 1467-985X. DOI 10.1080/14631377.2013.787737.
  29. Rose, A. K. and Stanley, T. D. (2005) “A meta-analysis of the effect of common currencies on international trade”, Journal of Economic Surveys, Vol. 19, No. 3, pp. 347-365. E-ISSN:1467-6419. DOI 10.1111/j.0950-0804.2005.00251.x.
  30. Silva, S. and Tenreyro S. (2006) “The log of gravity”, The Review of Economics And Statistics, Vol. 88, No. 4, pp. 641-658. E-1530-9142. ISSN 0034-6535. DOI 10.1162/rest.88.4.641.
  31. Shepherd, B. (2013) “The gravity model of international trade: A user guide”, Bangkok, United Nations publications, p. 76. ISBN-13 978-974-680-346-5.
  32. Swinnen, J. (2017) “Beer consumption and trade in an era of economic growth and globalization”, Choices, Vol. 32, No. 3, pp. 1-6. E-ISSN 2162-2884, ISSN 0886-5558. DOI 10.22004/ag.econ.263133.
  33. Tinbergen, J. (1962) “Shaping the world economy; Suggestions for an international economic policy”, New York, USA, Twentieth Century Fund, p. 330. ISBN-10: 1258384302, ISBN-13: 978-1258384302. DOI 10.2307/1236502.
  34. Thom, R. and Walsh, B. (2002) “Effect of a common currency on trade: lessons from the Irish experience”, European Economic Review, Vol. 46, No. 6, pp. 1111-1123. ISSN 0014-2921. DOI 10.1016/S0014-2921(01)00203-3.
  35. Tremblay, V. J. and Tremblay, C. H. (2004) “The US brewing industry: data and economic analysis”, Cambridge, USA, MIT Press, p. 400. ISBN-13 978-0262201513.
  36. Zeigler, D. W. (2008) “The alcohol industry and trade agreements: a preliminary assessment”, Addiction, Vol. 104, No. s1, pp. 13-26. E-ISSN 1360-0443. DOI 10.1111/j.1360-0443.2008.02431.x.
  37. Wine Institute. (2019) “International trade policy”. Wine Institute. [Online]. Available: https://www.wineinstitute.org/international_trade_policy [Accessed: 23 May 2019].

Full paper

  Full paper (.pdf, 399.73 KB).