Geographical indications: A first assessment of the impact on rural development in Italian NUTS3 regions

Abstract

Geographical indications (GIs) are a 25 years old European policy instrument and one objective of GIs is to foster rural development. In this respect, very few studies have quantitatively investigated to what extent this policy is effective. In fact, the literature is mainly focused on specific GIs, examined through case studies, in an attempt to identify which factors are responsible for the success or failure of specific initiatives. By contrast, the aim of the present study is to quantify the impact of such policy instrument on a single indicator of rural development: the agricultural value added. To assess the impact we firstly built an index measuring the number of GI schemes implemented at the NUTS3 level in the Italian regions. Then, following a difference-in-difference evaluation strategy and relying on an explicit theoretical model, a fixed effect estimator was implemented. The choice of the model, as well as the variables considered, was specified using a directed acyclic graph. The results show that an overall positive effect of GI protection on agricultural value added was identified in Italy, thus providing evidence of a positive impact of the European policy on rural development.