IDEAS home Printed from https://ideas.repec.org/a/ags/ifaamr/34347.html
   My bibliography  Save this article

International Investment Motivations Of U.S. Wineries

Author

Listed:
  • Pompelli, Greg
  • Pick, Daniel H.

Abstract

This study used personal and telephone interviews of wine industry executives and observers to examine the foreign direct investment motivations of U.S. wineries. Underlying most winery motivations was the recognition that U.S. wineries sense increasing pressure to offer a competitive range of wines that meet the price/quality needs of consumers and retailers in important markets and market segments. Wineries' marketing plans are often constrained by their ability to obtain adequate grape and juice supplies that meet important price and quality criteria, especially when domestic grape production drops. The importance of product portfolios and the industry's resource dependence have placed tremendous pressures on U.S. wineries to coordinate winegrape and juice acquisitions, especially as retailers consolidate their supply chains. Some U.S. wineries have invested abroad in response to these pressures while others have not. Interview results suggest that foreign investments by U.S. wineries were primarily motivated by the need for greater access to stable or adequate winegrape/juice supplies, the need for more control over the winegrape costs within given quality levels, and the desire to expand wine portfolios.

Suggested Citation

  • Pompelli, Greg & Pick, Daniel H., 1999. "International Investment Motivations Of U.S. Wineries," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 2(1), pages 1-16.
  • Handle: RePEc:ags:ifaamr:34347
    DOI: 10.22004/ag.econ.34347
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/34347/files/02010047.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.34347?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. James R. Markusen, 1995. "The Boundaries of Multinational Enterprises and the Theory of International Trade," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 169-189, Spring.
    2. Vaughan, Odette & Malanoski, Margaret & West, Don & Handy, Charles, 1994. "Firm Strategies for Accessing Foreign Markets and the Role of Government Policy," Working Papers 244113, Agriculture and Agri-Food Canada.
    3. Thomas A. Pugel, 1981. "The determinants of foreign direct investment: An analysis of US manufacturing industries," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 2(4), pages 220-228, December.
    4. Juan B. Solana-Rosillo & Philip C. Abbott, 1998. "International Entry Mode Decisions by Agribusiness Firms: Distribution and Market Power," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(5), pages 1080-1086.
    5. Christy, David P. & Grout, John R., 1994. "Safeguarding supply chain relationships," International Journal of Production Economics, Elsevier, vol. 36(3), pages 233-242, October.
    6. Raymond Vernon, 1966. "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, Oxford University Press, vol. 80(2), pages 190-207.
    7. Handy, Charles R., 1993. "Multinational Food Marketing: Competitive Strategies Of U.S. Firms," Journal of Food Distribution Research, Food Distribution Research Society, vol. 24(1), pages 1-9, February.
    8. Horst, Thomas, 1972. "Firm and Industry Determinants of the Decision to Invest Abroad: An Empirical Study," The Review of Economics and Statistics, MIT Press, vol. 54(3), pages 258-266, August.
    9. Morison, Julian B. & Officer, Linda J., 1992. "Factors Affecting Japanese Investment in the Australian Beef Industry," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 60(03), pages 1-12, December.
    10. de Meza, David & van der Ploeg, Frederick, 1987. "Production Flexibility as a Motive for Multinationality," Journal of Industrial Economics, Wiley Blackwell, vol. 35(3), pages 343-351, March.
    11. Grubaugh, Stephen G, 1987. "Determinants of Direct Foreign Investment," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 149-152, February.
    12. John H Dunning, 1980. "Towards an Eclectic Theory of International Production: Some Empirical Tests," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 11(1), pages 9-31, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cusmano, Lucia & Morrison, Andrea & Rabellotti, Roberta, 2010. "Catching up Trajectories in the Wine Sector: A Comparative Study of Chile, Italy, and South Africa," World Development, Elsevier, vol. 38(11), pages 1588-1602, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wendt, Minh & Pederson, Glenn D., 2006. "Foreign Direct Investment in the Food Manufacturing Industry," Working Papers 14319, University of Minnesota, The Food Industry Center.
    2. Borsos-Torstila, Julianna, . "The Determinants of Foreign Direct Investment Operations of Finnish MNCs in Transition Economies 1990-1995," ETLA A, The Research Institute of the Finnish Economy, number 28.
    3. Delgado-Gomez, Jose M. & Ramirez-Aleson, Marisa & Espitia-Escuer, Manuel Antonio, 2004. "Intangible resources as a key factor in the internationalisation of Spanish firms," Journal of Economic Behavior & Organization, Elsevier, vol. 53(4), pages 477-494, April.
    4. George Anastassopoulos, 2003. "MNE subsidiaries versus domestic enterprises: an analysis of their ownership and location-specific advantages," Applied Economics, Taylor & Francis Journals, vol. 35(13), pages 1505-1514.
    5. Degong Ma & Chun Lei & Farid Ullah & Raza Ullah & Qadar Bakhsh Baloch, 2019. "China’s One Belt and One Road Initiative and Outward Chinese Foreign Direct Investment in Europe," Sustainability, MDPI, vol. 11(24), pages 1-13, December.
    6. Dunning, John H., 2000. "The eclectic paradigm as an envelope for economic and business theories of MNE activity," International Business Review, Elsevier, vol. 9(2), pages 163-190, April.
    7. Hagen, James M., 1997. "Food Processing Firms And Foreign Production Incentives," Working Papers 14314, University of Minnesota, The Food Industry Center.
    8. Sethi, Deepak & Guisinger, Stephen & Ford, David L. & Phelan, Steven E., 2002. "Seeking greener pastures: a theoretical and empirical investigation into the changing trend of foreign direct investment flows in response to institutional and strategic factors," International Business Review, Elsevier, vol. 11(6), pages 685-705, December.
    9. Hornstein, Abigail S., 2011. "Where a contract is signed determines its value: Chinese provincial variation in utilized vs. contracted FDI flows," Journal of Comparative Economics, Elsevier, vol. 39(1), pages 92-107, March.
    10. Tolentino, Paz Estrella, 2008. "The determinants of the outward foreign direct investment of China and India: Whither the home country?," MERIT Working Papers 2008-049, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    11. Mutinelli, Marco & Piscitello, Lucia, 1997. "Differences in the strategic orientation of Italian MNEs in Central and Eastern Europe. The influence of firm-specific factors," International Business Review, Elsevier, vol. 6(2), pages 185-205, April.
    12. Isabel Faeth, 2009. "Determinants Of Foreign Direct Investment – A Tale Of Nine Theoretical Models," Journal of Economic Surveys, Wiley Blackwell, vol. 23(1), pages 165-196, February.
    13. Agarwal, Jamuna Prasad & Gubitz, Andrea & Nunnenkamp, Peter, 1991. "Foreign direct investment in developing countries: the case of Germany," Open Access Publications from Kiel Institute for the World Economy 423, Kiel Institute for the World Economy (IfW Kiel).
    14. Tan, Benjamin & Vertinsky, Ilan, 1995. "Strategic advantages of japanese electronics firms and the scale of their subsidiaries in the US and Canada," International Business Review, Elsevier, vol. 4(3), pages 373-386, September.
    15. Lin, Feng-Jyh, 2010. "The determinants of foreign direct investment in China: The case of Taiwanese firms in the IT industry," Journal of Business Research, Elsevier, vol. 63(5), pages 479-485, May.
    16. Liu, Zhiyuan & Xu, Yue & Wang, Peijie & Akamavi, Raphaël, 2016. "A pendulum gravity model of outward FDI and export," International Business Review, Elsevier, vol. 25(6), pages 1356-1371.
    17. George Anastassopoulos, 2004. "Profitability differences between MNE subsidiaries and domestic firms: The case of the food industry in Greece," Agribusiness, John Wiley & Sons, Ltd., vol. 20(1), pages 45-60.
    18. Helen Louri & Marina Papanastassiou & John Lantouris, 2000. "FDI in the EU Periphery: A Multinomial Logit Analysis of Greek Firm Strategies," Regional Studies, Taylor & Francis Journals, vol. 34(5), pages 419-427.
    19. Jingyuan Hou & Zhonghai Cheng & Xinshu Gong, 2022. "The Effect of Exports and Two-Way Foreign Direct Investment between China and Pan-East Asian Countries," Sustainability, MDPI, vol. 14(24), pages 1-19, December.
    20. Smarzynska Javorcik, Beata, 2004. "The composition of foreign direct investment and protection of intellectual property rights: Evidence from transition economies," European Economic Review, Elsevier, vol. 48(1), pages 39-62, February.

    More about this item

    Keywords

    International Relations/Trade;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ifaamr:34347. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/ifamaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.