Corvinus
Corvinus

Investigating the effect of geographical distances and cultural proximity on the Hungarian wine trade

Balogh, Jeremiás (2015) Investigating the effect of geographical distances and cultural proximity on the Hungarian wine trade. Society and Economy, 37 (4). pp. 513-529. DOI 10.1556/204.2015.37.4.6

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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 size 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 liberalisation have a positive impact, while geographical distance, landlockedness, and contiguity have a negative impact on Hungarian wine exports.

Item Type:Article
Uncontrolled Keywords:wine trade, Hungary, cultural and geographical proximity, gravity model
JEL classification:F13 - Trade Policy; International Trade Organizations
F14 - Empirical Studies of Trade
Q17 - Agriculture in International Trade
Subjects:Commerce and tourism
Agriculture
DOI:10.1556/204.2015.37.4.6
ID Code:2223
Deposited By: Ádám Hoffmann
Deposited On:16 Feb 2016 16:33
Last Modified:16 Feb 2016 16:33

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