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CRIEFF Discussion Paper Number 1103

World Wine Exports: What Determined the Success of the ‘New World’ Wine Producers?

Osiris Jorge Parcero (Research Affiliate CRIEFF, University of St. Andrews), Emiliano Villanueva (Research Affiliate AUIV, International Organization of Vine and Wine)

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Abstract

This paper looks at the evolution of the world wine industry in the period 1961-2005. A particular stylized fact is the appearance of non-traditional producing and exporting countries of wine from the beginning of the nineties. We show that the success of these new producing and exporting countries can be explained by the importance of the demand from non-producing countries with little or no tradition of wine consumption, relative to the world demand. This stylized fact is consistent with a testable implication of the switching cost literature and to the best of our knowledge this is the first time that this implication is tested.

JEL codes: Q13, Q17, N50

Keywords: exports, wine, industry dynamics, switching costs, new entrant

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