Abstract
The Effect of Tourism Overnight Stays on Croatia’s Extra Virgin Olive Oil Prices and Market Power: An Empirical Study
Highlights
This article investigates the market power (MP) of extra virgin olive oil (EVOO), which in our opinion is associated with rising international tourist demand, at least until the Covid-19 pandemic, using the example of the Republic of Croatia’s wholesale trade
The cumulative sum of the CUSUM and moving sum (MOSUM) for the recursive residuals plots – which is shown in Figure 1-4 from a recursive estimation of the model – indicate stability in the coefficients over the sample period in all cases
This article was directed towards attaining a full understanding of the causal relationships between international tourism overnight stays and the MP of EVOO from the wholesaler’s perspective
Summary
This article investigates the MP of EVOO, which in our opinion is associated with rising international tourist demand, at least until the Covid-19 pandemic, using the example of the Republic of Croatia’s wholesale trade. We argue that purchasing power is enriched by tourist buyers, which in turn causes EVOO price rises, empowering wholesalers’ position in the supply chain. International tourist demand has recorded high growth rates in recent years, which has increased the consumer potential for buying bottled EVOO in Croatia. The rise of wholesalers has been driven by an intuitive complementarity between their sourcing of goods from abroad and an expansion of their domestic distribution network to reach more buyers. Both elements require scale economies and lead to increased wholesaler market shares and markups, as explained in [4]
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