Explaining German imports of olive oil: evidence from a gravity model

In this study the case of olive oil imports of Germany is examined since olive oil is a traditional Mediterranean commodity and Germany is the biggest importer in the EU. A gravity model has been employed so as to analyse those factors that explain the German imports of olive oil that were identified in a preceding analysis of the German olive oil supply chain. The results of two random-effects models corrected for serial correlation and heteroskedasticity suggest that being a Mediterranean Partner country of the EU has the highest impact on trade flows to Germany, thus supporting further Euromediterranean trade integration. The level of trade to Germany is positively related to existence of direct marketing channels and to tourism implying that these factors should be explored more in the future by the Mediterranean countries so as to boost their exports.