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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.