INTERNATIONAL INVESTMENT MOTIVATIONS OF U.S. WINERIES

This study used personal and telephone interviews of wine industry executives and observers to examine the foreign direct investment motivations of U.S. wineries. Underlying most winery motivations was the recognition that U.S. wineries sense increasing pressure to offer a competitive range of wines that meet the price/quality needs of consumers and retailers in important markets and market segments. Wineries' marketing plans are often constrained by their ability to obtain adequate grape and juice supplies that meet important price and quality criteria, especially when domestic grape production drops. The importance of product portfolios and the industry's resource dependence have placed tremendous pressures on U.S. wineries to coordinate winegrape and juice acquisitions, especially as retailers consolidate their supply chains. Some U.S. wineries have invested abroad in response to these pressures while others have not. Interview results suggest that foreign investments by U.S. wineries were primarily motivated by the need for greater access to stable or adequate winegrape/juice supplies, the need for more control over the winegrape costs within given quality levels, and the desire to expand wine portfolios.International Relations/Trade,

EXPORT SUPPLY AND IMPORT DEMAND ELASTICITIES IN THE JAPANESE TEXTILE INDUSTRY: A PRODUCTION THEORY APPROACH

Agricultural goods are often treated as final goods in applied agricultural trade models. However, many agricultural traded goods are intermediate in nature. In this paper a production theory approach is applied in deriving export supply and import demand functions for the Japanese textile industry. The production theory approach derives import demand and export supply functions from the assumption of profit maximizing (cost minimizing) behavior. The behavioral implications of the profit maximization framework are used to specify producer supply and demand functions which are consistent with economic theory. Flexible functional forms are estimated in the econometric model and the concavity restrictions implied by economic theory are checked and imposed. Elasticities derived from the production theory approach are also compared with results based on a single equation specification of the aggregate import demand equation. A major shortcoming of the single equation approach is the lack of theoretical guidance for choosing the appropriate specification.International Relations/Trade,

Do Macroeconomic Variables Affect the Agricultural Trade Sector? An Elasticities Analysis

International Relations/Trade,

Labeling Policies in Food Markets: Private Incentives, Public Intervention, and Welfare Effects

This study considers the welfare impact of labeling policies of agricultural commodities with specific characteristics. Using a model of vertical differentiation, the effects on equilibrium and welfare levels are calculated. The introduction of the regulation and the emergence of two differentiated competitive markets leaves consumers and high-quality producers better off, while low-quality producers are worse off. With high costs and low quality differences, the total welfare impact of the regulation can be negative. Findings show that when high-quality producers can exercise market power, the regulation could be more easily accepted by producers, but it would have a negative effect on consumers.asymmetric information, food markets, labeling, market power, vertical differentiation, welfare effects, Agricultural and Food Policy,

Geographical Indications and the Competitive Provision of Quality in Agricultural Markets

The economics of geographical indications (GIs) is assessed within a vertical product differentiation framework that is consistent with the competitive structure of the agricultural sector with free entry/exit. It is assumed that certification costs are needed for GIs to serve as (collective) credible quality certification devices, and production of high-quality product is endogenously determined. We find that GIs can support a competitive provision of quality that partly overcomes the market failure and leads to clear welfare gains, although they fall short of delivering the (constrained) first-best level of the high-quality good. The main beneficiaries of the welfare gains are consumers. Producers may also accrue some benefit if the production of high-quality products draws on scarce factors that they own.geographical indications; quality certification; Welfare; competitive industry; free entry/exit; Marshallian stability; trademarks

DOES INDUSTRIAL CONCENTRATION RAISE PRODUCTIVITY IN FOOD INDUSTRIES?

This manuscript investigates the productivity-industrial concentration relationship in U.S. food industries. We identify a critical level of industrial concentration beyond which its relationship with productivity growth becomes negative. The welfare effects of an increase in concentration - productivity growth and deadweight loss- are computed. Welfare loss from increasing concentration is substantially offset by gains from productivity growth.Industrial Organization, Productivity Analysis,

How Much Do Consumers Benefit from New Brand Introductions? The Case of Potato Chips

This study identifies consumer welfare from new brand introductions in the potato chip market. Price and variety effects of new brand introduction are measured by estimating a demand system underlying an expenditure function. Variety effects are positive in most cities, while price effects are generally negative when consumers exhibit some variety preference. Variety effects dominate price effects in most cities; an opposite effect observed in some cities may indicate high entry barriers or joint brand- and price-based marketing strategies. Results indicate that consumers and producers gain from product innovations, but substantial regional variation exists in the distributional effects of new brand introduction.city-demand system, compensating variation, consumer welfare, new brands, virtual prices, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety,