Geographical Indications and local development: the strength of territorial embeddedness

Fabrizio De Filippis,Mara Giua,Riccardo Crescenzi,Cristina Vaquero-Piñeiro

doi:10.1080/00343404.2021.1946499

Fabrizio De Filippis, Mara Giua + Show 2 more

Open Access

https://doi.org/10.1080/00343404.2021.1946499

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Abstract

ABSTRACT Can Geographical Indications (GIs) promote local economic development in rural areas? This paper explores the impact of GIs that identify and endorse agri-food products which are strictly embedded within the territory from which they originate. Examining Italian wine protected by GIs through an innovative dataset and by means of propensity score matching and difference-in-differences models make it possible to compare the local economic development trajectories of rural municipalities afforded GIs with the correspondent dynamics of a counterfactual group of similar municipalities without GI status since 1951. Rural municipalities with GIs experience population growth and economic reorganization towards non-farming sectors, which frequently involve higher value-added activities.

Highlights

The globalization of production, consumption and exchange means that the competitivity of local territories within global markets is highly dependent on their capacity to leverage their own cultural, territorial and economic specificities via the provision of supportive institutions and policies (e.g., Organisation for Economic Co-operation and Development (OECD), 2016)
Our findings show that Geographical Indications (GIs) play a propulsive role for the local development of rural areas: in Italy, all else equal, rural municipalities with space-sensitive production acknowledged by GIs experience better local economic development trends over the 1951–2011 period
Controls include: a municipality–year-varying variable accounting for the total number of acknowledged Geographical Indications (GIs); a t – 1 level of population/farm employment/non-farm employment; a municipality–year-varying dummy accounting for the presence of di Origine Controllata e Garantita (DOCG) sparkling wine; a municipality–year-varying dummy accounting for the presence of DOCG monovarietal wines; a municipality-varying dummy classifying municipalities belonging to United Nations Educational, Scientific and Cultural Organization (UNESCO) area; municipality-varying dummies accounting for the years of certification; and a municipality–year-varying dummy accounting for the presence of one of the most successful Italian GIs as classified by the official national ranking provided by the 2019 annual report of the ISMEA-Qualivita (Qualivita, 2019)

Summary

Introduction

The globalization of production, consumption and exchange means that the competitivity of local territories within global markets is highly dependent on their capacity to leverage their own cultural, territorial and economic specificities via the provision of supportive institutions and policies (e.g., Organisation for Economic Co-operation and Development (OECD), 2016).

Results

Conclusion