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Investigating the Effect of Geographical Distances and Cultural Proximity on the Hungarian Wine Trade

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  • Jeremiás Máté Balogh

    (Department of Agricultural Economics and Rural Development, Corvinus University of Budapest)

Abstract

Wine is a very special product from an economic, cultural, and sociological point of view. Wine culture and wine trade play an important role in Hungary. The effect of cultural and geographical proximity on international trade has already been proven in the international trade literature. The size of bilateral trade flows between any two countries can be approximated by the gravity theory of trade. The gravity model provides empirical evidence of the relationship between the sizes of the economies, the distances between them, and their trade. This paper seeks to analyse the effect of cultural and geographical proximity on Hungary’s bilateral wine trade between 2000 and 2012, employing the gravity equation. The analysis is based on data from the World Bank WITS, WDI, as well as CEPII, and WTO databases. I apply OLS, Random Effects, Poisson, Pseudo-Poisson-Maximum-Likelihood and Heckman two stage estimators to calculate the gravity regression. The results show that in the case of Hungary, cultural similarity and trade liberalization have a positive impact, while geographical distance, landlockedness, and contiguity have a negative impact on Hungarian wine exports.

Suggested Citation

  • Jeremiás Máté Balogh, 2015. "Investigating the Effect of Geographical Distances and Cultural Proximity on the Hungarian Wine Trade," Society and Economy, Akadémiai Kiadó, Hungary, vol. 37(4), pages 513-529, December.
    • Handle: RePEc:aka:soceco:v:37:y:2015:i:4:p:513-529
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    File URL: http://www.akademiai.com/doi/pdf/10.1556/204.2015.37.4.6
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    Citations

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    Cited by:

    1. Eva Bieleková & Ján Pokrivčák, 2020. "Determinants of International Beer Export," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(2), June.
    2. Uwizeyemungu, Sylvestre & Poba-Nzaou, Placide & St-Pierre, Josée, 2022. "Back-end information technology resources and manufacturing SMEs’ export commitment: An empirical investigation," International Business Review, Elsevier, vol. 31(5).

    More about this item

    Keywords

    wine trade; Hungary; cultural and geographical proximity; gravity model;
    All these keywords.

    JEL classification:

    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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