Abstract
Mediterranean countries have noticeable affect on the world wine exportation. Among these countries France, Greece and Turkey are selected for this study because of different wine market, trade systems and wine policies they have. In this study, cointegration analysis was conducted for real wine export prices and real exchange rates for France, Greece and Turkey. The long term relationships between real exchange rates and real wine export values were explored by using cointegration analysis. Annual data from 1970 to 2003 was used for this analysis and the data sets were found to be integrated of the same order. It was also found that they move together in the long run by Johansen Cointegration Test. Then, Error Correction Model (ECM) was applied to search any short term relations and impacts of exchange rate variations on wine exports. French and Greek monetary policies affect their wine export volume by the years. Therefore, any depreciation of local currency in dollar terms will lead to increase of exports vice versa. On the other hand, Turkish wine real export value and real exchange rate were found not cointegrated. Since, there was not any cointegrated vector, any exchange rate volatility do not influence Turkish real export wine value. Subsequently, the reasons of wine market failures in these countries and pursued policies were discussed.
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