Comparative Advantage of Turkish Olive Oil in Global Markets: An Empirical Analysis

Abstract

Purpose: This study aims to reveal the comparative advantage of the selected countries in oliveoil industry. These selected countries are the main olive oil producers and mainly located inMediterranean Seacoast. Spain, Italy, Greece and Turkey will be the subject countries in thisanalysis and compared with each other in terms of their export performance and comparativeadvantage in olive oil industry globally. Olive oil industry has a volume of around 20 billionEuros every year. Design/methodology/approach: The data for the research was collected frommainly World Bank and trade ministries of subject countries. Revealed Comparative advantageIndex (RCA) is used to compare the advantage of these countries in olive oil industry. Theseindexes found in this analysis will be added to the olive oil RCA indexes of these countries thatare found in the previous researches. The obtained data were analyzed through RCA Indexformula modeling. Findings:Consuming olive oil is increasing day by day over the world. Theresearch results show that Turkey has comparative advantage in olive industry over Greece. Lastfew years, Turkey has improved its comparative advantage over Italy. Spain and Italy are theleading countries in olive oil industry in terms of comparative advantage. It has also been foundthat Turkey has consistently increase its advantage over the last decade. Practical implications:After the comparison of RCA indexes of Spain, Greece, Italy and Turkey, it is found that higheramount of production of olive oil is not enough itself to improve the competitiveness of a countryin olive oil market. Branding, packaging and marketing activities that are supported by researchand development expenditures are highly important factors for a consistent competitiveadvantage in olive oil industry. Olive oil consumers are highly motivated on the packaging andlabel of a product when it comes to olive oil. They usually trust Mediterranean brands comparingto others. Originality/value: The study answers the advantages of selected countries in terms ofolive oil performance in global markets. Export performance of olive oil is much likely toimprove the competitiveness of a country rather than a country that produces high volume ofolive oil. Production itself is not enough to increase competitiveness of a country in olive oilmarket.