From local to global, and return: Geographical indications and FDI in Europe

Abstract

AbstractThe geographical indication (GI) scheme of the European Union guarantees visibility and protection to high‐quality agri‐food products associated with a demarcated region of origin. This paper estimates the impact of the scheme in attracting agri‐food foreign direct investment (FDI) in European NUTS3 regions, using a novel dataset and a generalized propensity score matching approach. Areas endorsed with GIs attract more FDI in agri‐food‐related activities than their non‐GI counterparts. Positive effects, estimated for FDI inflows, related job creation and inter‐sectoral spillovers on local employment, involves territories with lower institutional quality.