Drivers of Wine Production in the European Union: A Macroeconomic Perspective

Abstract

Over the last decades, the European wine industry has been object of increased international competition, which has implications for the dynamics of wine production. This paper examines the underlying factors of wine production in the European Union (EU) from a macroeconomic perspective. We apply an expanded Cobb-Douglas production function, which includes monetary indicators. A dynamic panel data GMM approach along with pooled OLS and fixed effect model for the period from 1999-2014 are applied to estimate the model. We find a positive impact from labour, capital and wine export and a negative impact from interest rate to wine production; however, no robust and significant impact is observed from wine import as well as from inflation and exchange rates. Our results indicate that EU wine production is influenced by monetary policy, which could be a useful instrument for policy makers promoting wine production in this region.

Covid 19, Taxes Trump et Brexit: Comparaison des effets sur les exportations françaises de vin entre vignerons indépendants et coopératives vinicoles

“…Des comparaisons avec les contextes de l'Espagne ou de l'Italie, permettraient d'identifier les tendances communes aux trois pays (qui sont les leaders en termes d'exportations au niveau mondial) ainsi que les différences entre les contextes de ces grands producteurs viticoles du Sud de l'Europe. Certaines dynamiques compétitives exacerbées par l'environnement international étaient déjà présentes auparavant (Behmiri et al, 2019). Il s'agira d'identifier plus finement les effets de ces changements par rapport aux évolutions tendancielles.…”

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In this paper, we aim at assessing the effects of the 2019 on exporting activities of wine companies, relying on a survey carried out on French exporting wine companies. The aim is also to observe possible different effects on independent wineries and cooperatives.

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Macroeconomic Determinants of Wine Production in the European Union

“…Atkin, Gilinsky & Newton (2012) build on Porter's research in 1985 and attempt to demonstrate the link between the presence of an environmental strategy and competitive advantage in the wine industry, while others state that it is the degree of innovation that leads to competitive advantage (Conto, Antuners Junior, Vaccaro, 2016;Anning-Dorson, 2018). In their paper, Behmiri, Correia, & Gouveia (2019) focused on the drivers of wine production in the EU from a macroeconomic perspective with emphasis on monetary indicators by testing the impact of labour, investment, export, import, interest rate, and exchange rate on wine production. Against this background, identifying the factors that lead to the strengthening of the competitive advantage is the key to the success of the wine industry of each country.…”

“…On the supply side, many changes have occurred due to the globalization of the wine industry, the appearance of New World suppliers and the global economic crisis. While on one hand wine imports showed a constant growth (appsso.eurostat.ec.europa.eu), indicating a strong activity of wine producers from non-EU countries, wine consumption showed a constant decline in the period between 2005 and 2017 (International Organization of Vine and Wine, OIV, available at: oiv.int), partly due to the global economic crisis and partly due to the changing trends in consumer preferences (Brunner & Siegrist, 2011). The globalization of the wine market and changes in consumer preferences, both in the EU and in emerging markets (Camillo, 2012), have led to the need for the EU wine strategy to build on tradition and quality as its recognized advantages, resulting in an increased share of quality and premium wines in EU production.…”