[E] Exporters' behavior in the face of climate volatility
Le 5 déc. 2024 de 13h00 à 14h00
Séminaire le 5 décembre 2024 à 13h à Bayonne, en salle 110 ; en visioconférence à Pau en Salle des thèses (bâtiment DEG) ; via Teams.
Abstract
This study investigates how exporters when confronted with hybrid production and demand shocks make export decisions. We exploit a unique dataset compiling French wine shipments from 2001 to 2020 for 134 Protected Denomination of Origin (PDO) regions, supplemented with daily weather data from Météo-France. Employing a series of gravity estimations, our findings indicate that extreme weather conditions significantly affect both the intensive and extensive margins of trade, while favorable weather conditions bolster them. A heterogeneity analysis further reveals that volumes exported to core markets exhibit less sensitivity to extreme weather events, suggesting that French wine exporters discriminate between importing markets and prioritize maintaining market shares in core destinations amidst weather disruptions. Subsequently, we offer a theoretical analysis elucidating how the volatility of climate shocks, affecting production and quality, shapes export behavior. Firms may opt to reduce marketing investments aimed at reaching consumers while reallocating resources to the most promising markets. Additionally, some firms may find it advantageous to streamline their portfolio by exiting less favorable markets.
