Country of Origin and Foreign-Sounding Effects a Study on Italian and French Wines in International Markets

Abstract

Studies have focused on the country of origin (COO), however, it is also possible that a producer markets a product by referring to a set of symbols, images, words, and values typical of a place but without the product being designed or produced there (foreign sounding – FS - effect). Focusing on wines, this study investigates which of the two effects (COO or FS) provide a price premium (or loss) for products with real or assumed associations with French and Italian production culture. The empirical analysis draws on matched sampling and exploits a database built with web-scraping and text-mining techniques on more than 17 thousand wine bottles offered by online wine retailers based in the US, UK, and Australia. Findings show that Made-in-France bottles benefit from a positive effect on prices, while, in general, Made-in-Italy, Italian-sounding, and French-sounding bottles suffer from price penalties across different geographies and price ranges.