CEPII, Recherche et Expertise sur l'economie mondiale
On the competitiveness effects of quality labels: Evidence from the French cheese industry

Sabine Duvaleix-Treguer
Charlotte Emlinger
Carl Gaigné
Karine Latouche

 Highlights :
  • The paper investigates the impact of Protected Designations of Origin (PDO) on French firm export competitiveness in the cheese and cream industry.
  • PDO labelling positively impacts the extensive margin of trade and the trade unit value, but have no effects of the intensive margin of trade.
  • PDO products are perceived as products of higher quality by consumers, whatever the destination country.

 Abstract :
The paper questions the impact of geographical indication labels on firm export competitiveness in the French cheese and cream industry. We use firm level data from the French custom and an original dataset of firms and products concerned by Protected Designations of Origin (PDO).  Our estimations show that PDO labeling allows firms to increase their price by 11.5% on average. Moreover these products are perceived by consumers as products of better quality than non-PDO products. Regarding trade margins, while the effect on trade volume (the intensive margin of trade) is not significant, PDO labeling increases the probability of serving a foreign country (the extensive margin of trade). Our estimations show that exports of PDO products would increase by 11.4% if non-EU consumers value PDO label as much as EU consumers.

 Keywords : Geographical Indication | PDO | Trade Margins | Product Quality | Price

 JEL : F10, F14
CEPII Working Paper
N°2018-17, October 2018

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