In this paper we examine the factors that affect the trade of olive-oil within the 28 member-countries of the European Union. We do this by applying the gravity model of trade, which is regarded by many as the most appropriate tool for the analysis of fac- tors affecting trade. The empirical study is based on data collected on unidirectional trade volumes of olive-oil of the European Union member states for a period of 16 years (from 2000 until 2015). We perform Pooled OLS, Fixed and Random Effects regres- sions, implementing one-way, two-way and dyadic clustering on our data. After per- forming the relevant F-test and Hausman test we find that the Fixed Effects method is the most efficient one and see that, as expected, an increase in the price of olive-oil has a negative result on quantities traded whereas an increase in the per capita GDP of either the exporter or the importer has a positive effect.


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