An empirical assessment of export determinants using a gravity model
Data
2016-07
Autores
Gouveia, Sofia Helena Cerqueira de
Rebelo, João Fernandes
Gomes, Lina Sofia Matos Lourenço
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Resumo
In this study, a gravity model approach is used to analyze the main factors affecting Port wine exports, differentiated by quality, from Portugal to the top 20 importer countries from 2006 to 2014. By applying the Hausman-Taylor estimator, the findings show that the quantity and value of total Port wine exports are positively determined by the gross domestic product (GDP) per capita, Portuguese emigrant communities and a common language, while exports are negatively influenced by landlockedness. In contrast to traditional gravity model, distance does not appear as a significant determinant, a fact explained by the specificity and singularity of Port wine and by the long tradition of this product in international markets. In addition, the results revealed specific determinants by categories such as GDP – for aged Port – and wine consumption per capita – for high standard, vintage and aged Port – suggesting that Portugal needs to increase its exports of high quality Port wine to markets that are exhibiting a tendency towards growing wine consumption per capita and to large and fast-growing economies.