Abstract
The aim of this study is to investigate the long-term determinants of China’s imported wine demand and to forecast wine imports from 2019 to 2023 using econometric methods. Auto-regressive distributed lag models are developed based on neoclassical economic demand theory to investigate the long-term determinants of China’s demand for imported bottled, bulk, and sparkling wine from the top five countries of origin. The empirical results demonstrate that income is the most important determinant of China’s imported wine demand, and that price only plays a significant role in a few markets. Substitute and complement effects are identified between wines from different countries of origin and between imported wines and other liquids. China’s imported wine demand is expected to maintain its rapid growth over the forecast period. Bottled wine will continue to dominate China’s imported wine market. France will have the largest market share in the bottled wine market, Spain will be the largest provider of bulk wine, and Italy will hold the same position for sparkling wine. This is the first study to use a single equation with the general to specific method rather than a system of equations to estimate and forecast China’s demand for imported bottled, bulk, and sparkling wines from different countries of origin. The more specific model setting for each country of origin improves forecasting accuracy.
Highlights
China’s wine consumption has attracted global attention in recent years as its wine imports soared from 286 million liters in 2010 to 679 million liters in 2018, with an average annual growth rate of 11.4% (China Customs Statistics, 2016)
This study investigates the long-term determinants of China’s imported wine demand and generates forecasts for 2019 to 2023 wine imports using econometric methods
The Augmented Dickey–Fuller (ADF) and Phillips–Perron (PP) tests and the Covariate Augmented Dickey–Fuller (CADF) test are used to examine the integration order of all variables in the proposed models
Summary
China’s wine consumption has attracted global attention in recent years as its wine imports soared from 286 million liters in 2010 to 679 million liters in 2018, with an average annual growth rate of 11.4% (China Customs Statistics, 2016). Around 80% of China’s wine consumption is domestic, its imported wine market was the fourth largest worldwide in 2018 (Workman, 2019). Given the impressive volume of total consumption, wine exporters across the world have embraced the Chinese market (Anderson & Wittwer, 2015). China’s sustained economic growth and rising incomes over the last few decades have stimulated the growth of its wine consumption G. Li et al, 2011; F
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
