Product differentiation and entry barriers: Mediterranean export firms in the American markets for olive oil prior to World War II

Abstract

This article analyses the entry process of Mediterranean export firms in the American markets for packaged olive oil between the 1880s and the 1930s. It explores whether those entry barriers traditionally identified by the literature emerged and to what extent they influenced such an entry process. Using trade data for the early 1930s, the article shows higher average levels of exporters' concentration in the Americas than elsewhere. It also documents that by around 1930 most of the Mediterranean firms leading packaged olive oil exports to Argentina and the USA had entered the markets on the other side of the Atlantic before World War I. Finally, it identifies product differentiation as a source of entry barrier in markets for packaged olive oil in the early 1930s. The article suggests that as the American markets for this product matured early-entrant advantages associated with the use of modern marketing became more apparent, which probably raised the cost of entry to new Mediterranean export firms during the inter-war period.