Market Structure and Price-Cost Margins in European Retail Gasoline Industry

Abstract

Purpose: The purpose of this study was to investigate the influence of market structure and market conduct characteristics (such as market concentration, presence of networks operated by global corporations, presence of vertically integrated companies, presence of hypermarket gasoline stations and consumption level) on price-cost margin levels, based on an example of the European Union retail gasoline market. Methodology:The research applied regression analysis on a panel data set comprising of average monthly price-cost margins for 2012 to 2015, based on the data published in the European Commission Oil Bulletin, and on a set of variables characterizing market structure and market conduct of 24 European Union member state countries. Findings:The results showed that in the case of retail gasoline markets, higher industrial concentration yields higher price-cost margins with a statistically significant influence of other market structure and conduct factors.

Do classes of gas stations contribute differently to fuel prices? Evidence to foster effective competition in Spain

“…These results regularly indicate that more competition derived from the number of stations in a delimited geographical area is negatively associated with retail fuel prices or gross margins on wholesale prices (e.g., Barron et al, 2004;Clemenz and Gugler, 2006;Cooper and Jones, 2007;Sen and Townley, 2010;Nowakowski and Karasiewicz, 2016;Tappata and Yan, 2017;Bernardo, 2018). For example, estimates in Barron et al, 2004 indicate that a 50% increase in the number of competitors within a 1.5mile radius around a station implies a decrease in the price of that station by about 0.5%.…”

Examining the Competitiveness in European Banking Industry with Fuzzy AHP and Fuzzy TOPSIS Approaches

“…Sircar et al (2015) and Zuhroh et al (2015) also underlined the significance of the same issue for different regions, such as India and Indonesia. Parameswar et al (2017) and Nowakowski and Karasiewicz (2016) also stated that cost effectiveness is an important issue to survive in competitive banking industry.…”

Does multimarket contact affect prices in the retail fuel industry? First empirical evidence

“…This could be particularly relevant at least for Spain, where the regulatory agency has repeatedly expressed concern about prices being relatively higher than in neighboring countries (e.g., CNMC, 2018). On the other hand, including an indicator of multimarket contact in the competition analysis can be seen as a natural extension of those models devoted to measuring the impact of the local concentration of stations in home markets on fuel prices (e.g., Nowakowski and Karasiewicz, 2016;Tappata and Yan, 2017;Bernardo, 2018;Oczkowski et al, 2018;Kvasnička et al, 2018;Balaguer and Ripollés, 2020). 1 Considering contacts in non-home markets could imply more accurate estimates of the concentration e↵ect if contacts are useful to explain prices 1 An interesting survey on a first generation of papers on this topic can be seen in Eckert (2013).…”