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What Determines Exports of Luxury Products? The Case of Cognac

Author

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  • Bouët, Antoine
  • Emlinger, Charlotte
  • Lamani, Viola

Abstract

This paper analyzes the determinants of Cognac brandy exports using a unique database on Cognac shipments to more than 140 destinations between 1996 and 2013. We use this database to construct descriptive statistics concerning the evolution of Cognac exports during this period. We also construct a database of protectionist policies that affect worldwide Cognac exports. We analyze the determinants of Cognac exports and base our empirical strategy on Heckman's (1979) procedure. We estimate successively the impact of geographical, demand and policy factors on the extensive margin of trade and the intensive margin of trade. We also control for the possibility of an endogeneity bias on the probability of trade. We show that i) as with other luxury products, the elasticity of Cognac exports to distance is negative, significant, and relatively small, while the elasticity to gross domestic product (GDP) is positive, significant, and relatively large; and ii) average customs duties do not have a significant impact on the intensive margin but significantly and positively affect the probability of trade. We discuss this last result and correct the endogeneity bias using tax revenues of importing countries in percentage of GDP as an instrument. (JEL Classifications: F10, F14)

Suggested Citation

  • Bouët, Antoine & Emlinger, Charlotte & Lamani, Viola, 2017. "What Determines Exports of Luxury Products? The Case of Cognac," Journal of Wine Economics, Cambridge University Press, vol. 12(1), pages 37-58, February.
    • Handle: RePEc:cup:jwecon:v:12:y:2017:i:01:p:37-58_00
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    Cited by:

    1. Olivier Bargain & Jean‐Marie Cardebat & Raphaël Chiappini, 2023. "Trade uncorked: Genetic distance and taste‐related barriers in wine trade," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(2), pages 674-708, March.
    2. Charlotte Emlinger & Viola Lamani, 2020. "International trade, quality sorting and trade costs: the case of Cognac," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(3), pages 579-609, August.
    3. repec:ehl:lserod:110767 is not listed on IDEAS
    4. Macedo, Anthony & Rebelo, João & Gouveia, Sofia, . "Export propensity and intensity in the wine industry: a fractional econometric approach," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 8(3).
    5. Lara Agnoli & J. François Outreville, 2021. "Wine Consumption and Culture: A Cross‐Country Analysis," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(3), pages 1101-1124, September.
    6. Eva Bieleková & Ján Pokrivčák, . "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).
    7. Wakuo Saito & Makoto Nakakita & Teruo Nakatsuma, 2024. "Comparative Analysis of Japanese Rice Wine Export Trends: Large Firms in the Nada Region vs. SMEs in Other Regions," World, MDPI, vol. 5(3), pages 1-23, August.
    8. Olivier Bargain, 2024. "Globalization and cultural spillover in trade: evidence from the Japanese food culture," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 160(1), pages 55-73, February.
    9. Olivier BARGAIN & Jean-Marie CARDEBAT & Raphaël CHIAPPINI, 2020. "Trade Uncorked: Genetic Resistance and Quality Heterogeneity in Wine Exports," Bordeaux Economics Working Papers 2020-18, Bordeaux School of Economics (BSE).

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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