Export Patterns of the Chinese Wine Industry:

Abstract: This paper intends to examine the trade patterns of a novelty export good, namely that of Chinese wine. An econometric model will be constructed aiming to explain the trade patterns of this good. The paper further wishes to incorporate the Linder hypothesis which contradicts the traditional Heckscher-Ohlin theory on trade. We believe it to be of interest to examine a novelty export product with Linder’s trade theory in mind. We will also try to develop the traditional Linder theory by not only incorporating total GDP data but also different income distribution variables. We will also make use of the relatively new FEVD estimation procedure, demonstrating how it is applicable when constructing models containing time-invariant or almost time-invariant variables.