Does wine quality have a bearing on exports?

Abstract

This study examines the macroeconomic determinants of exports, taking quality into account through vertical differentiation and using data on Portuguese Douro wines. Based on a gravity model from 2006 to 2015 and covering a range of 192 potential trade partners, estimations show that quality influences export performance. However, quality differences are not assimilated in the same way in all international markets, resulting in an export surplus of the best categories of wine to some world regions (West Europe and Anglo-Saxon countries) and a correspondingly export deficit to other regions (Middle East, North Africa, East Europe and Central Asia).