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|Title: ||Testing for a potential market power of the chilean wine exports: a pricing-to-market approach|
|Authors: ||Crespo, Ricardo|
Cramon-Taubadel, S. von (Prof. Guía)
Troncoso Correa, Javier (Prof. Guía)
|Keywords: ||Monopolistic competition|
Exchange rate variations
|Issue Date: ||2004 |
|Publisher: ||Universidad de Talca (Chile). Facultad de Ciencias Agrarias|
|Abstract: ||Over the past two decades, the Chilean wine industry has shown a remarkable performance.
Exports have risen from less than US$ 80 million, at the end of the 80’s, to US$ 570 million in
2000. Nevertheless, and due to Chile is far from enjoying the reputation of the leading wine
producing countries (France, Italy and Spain), and contributes with only 5 percent of the
world exports; it is generally considered that Chilean wine exporters have no market power
in the international context, behaving just as “price takers”. Nonetheless, as there is some
evidence that the wine industry corresponds to a case of monopolistic competition, a
potential Chilean market power is tested.
This study uses for that purpose the Pricing-to-Market approach, which has dominated the
empirical literature in this field over the last decades. The analysis of this approach focuses
on how export prices vary with respect to exchange rate fluctuations. If Chile behaves as a
“price taker” in the international wine market, then its wine export price in local currency
becomes unresponsive vis-à-vis exchange rate variations, and no Pricing-to-Market
behavior is detected.
A potential market power of Chilean wine exports is tested on five destination countries:
Canada, Germany, Unites States, United Kingdom and Mexico. Results indicate that
Pricing-to-Market behavior is present in all the selected countries, but Germany. Thus,
Chilean exports would be able to adjust their markups by controlling the wine export price.
This behavior is not possible consequently in the German market.
The results are expected to provide to Chilean exporters and policy markers with valuable
information as a means of collaborating with their marketing and pricing strategies.
Keywords : Monopolistic competition, price taker, export prices, exchange rate variations,
|Description: ||84 p.|
|Appears in Collections:||Tesis de Magíster en Agronegocios Internacionales|
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