Local Knowledge National Advantage? The Relationship Between the Spatial Networks of German Vineyards and the Quality of Wine

Abstract

In this study, the effect of the spatial network on quality is explored. Using the case of German wineries, the impact of their distances to each other as well as density and spatial cluster size is taken to assess if proximity increases the score these wineries attain on a national level. 60% percent of wine in Germany is sold through large discounters; small wineries are therefore increasingly exposed to the pressure of producing low-cost wine of decent quality. To escape these market dynamics, quality production plays a crucial role. As wine-making is very dependent on human expertise, it is intriguing to assess the factors influencing the quality of wine apart from geological conditions. A database consisting of 1,863 wineries, including their distances to each other and spatial factors, is developed and a network analysis is applied in order to assess if there is a relationship between the spatial network of wineries and quality. The results reveal some noteworthy dynamics: Wineries seem to thrive best in clusters with a limited number of close neighbors which suggests that proximity enforces the flow of expertise and thus quality. Interestingly however, more space and the presence of both close neighbors and actors further away seem to exhibit positive effects on quality. Thus, while the analysis finds support for the effect of proximity on quality, additional findings suggest that other dynamics play a role as well and offer potential for future research. The fact that spatial networks have an impact on quality indicates that local knowledge matters and offers individual wineries, as well as regions and national associations an incentive to promote communication in order to benefit from expertise embedded in local clusters.