Macchiavello, Rocco (2010) Development uncorked : reputation acquisition in the new market for Chilean wines in the UK. Discussion Paper. Coventry: Centre for Economic Policy Research. (CEPR Discussion Paper). (Unpublished)

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Abstract

This paper studies learning effects in new markets using a panel of relationships between Chilean wineries and distributors in the UK. Controlling for winery, distributors and time effects, FOB prices increase by at least three percent with every additional year in a relationship while export volumes do not drop. The implied shift in demand is not explained by improvements in product quality, or by distributor, product and match-specific effects. FOB prices responses to relationship specific exogenous changes in marketing costs induced by exchange rates dynamics suggest that wineries bargaining power increases over time. Following their first relationship in the market, wineries are re-matched to distributors of higher quality. The evidence suggests that learning about wineries is an important determinant of the positive age effects on FOB prices but also that learning takes considerably long time. Policy implications are discussed.

Item Type:	Working or Discussion Paper (Discussion Paper)
Subjects:	H Social Sciences > HF Commerce
Divisions:	Faculty of Social Sciences > Economics
Series Name:	CEPR Discussion Paper
Publisher:	Centre for Economic Policy Research
Place of Publication:	Coventry
Date:	February 2010
Number:	No.7698
Status:	Not Peer Reviewed
Publication Status:	Unpublished
Access rights to Published version:	Restricted or Subscription Access
URI:	http://wrap.warwick.ac.uk/id/eprint/45497

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