Understanding the Real-World Impact of Geographical Indications: A Critical Review of the Empirical Economic Literature

Abstract

In our study, we tried to collect empirical studies focusing on the economic impact of Geographical Indications (GIs). Using a systematic literature review approach, we investigated three different aspects: market size, price premium and impacts on rural development. Based on the findings of studies both from the grey and academic literature, the results are quite mixed. Though the number of GI-related empirical studies has risen in recent years, there is a lack of economic data to support policies related to GIs, even in the European Union (EU), where the most important GI system exists. Overall, it is impossible to draw any general conclusions about the economic impact of GIs. Some countries have remarkable GI market size, and some GI products have a determinative role in both domestic and export markets; however, it is not general. Again, some particular GI products of some regions could gain significant price premiums, but due to the associated higher production costs and unequal distribution in the value chain, it might not result in higher producer incomes. The most conflicting empirical results were found in how GIs can contribute to regional prosperity, as evidences of the harmful effects of GIs on rural development were also identified.