Analyzing production functions and technical efficiency across quality tiers: a study of Argentine wineries

Purpose This paper compares production functions of Argentine wineries based on pursued wine quality, and evaluates technical efficiency within these groups, focusing on differences between exporters and non-exporters. Design/methodology/approach Survey data from 230 Argentine wineries are used to estimate production functions and assess technical efficiency through Stochastic Frontier Analysis. The analysis categorizes wineries by wine pursued quality and further segments them into exporters and non-exporters. Findings The findings highlight distinct production technologies and input intensities between wine producers. High-quality wineries rely more on labor and capital, unlike their low-quality counterparts that depend more on land surface and grape yields. Additionally, within the high-quality tier, exporters with high export intensity show a statistically significant efficiency advantage over non-exporters. Research limitations/implications The cross-sectional nature of the data limits the observation of changes over time and prevents addressing potential endogeneity between export status and efficiency. Panel data could offer deeper insights into the dynamic relationship between these factors and market performance. Originality/value This study reveals differences in production technology among wineries and underscores the role of product differentiation in international competitiveness. It also introduces a novel methodology for measuring pursued wine quality, contributing new insights to production and efficiency research.