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.