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Does Excellence Pay Off? Evidence from the Italian Wine Market

Author

Listed:
  • Castriota Stefano

    (Dipartimento di Scienze Politiche, Università di Pisa, Pisa, Italy)

  • Fedele Alessandro

    (Faculty of Economics and Management, Free University of Bolzano, Bolzano, Italy)

Abstract

Considering the Italian wine market, we investigate the relationship between product quality, on the one hand, and profits and profitability, on the other hand. Using data from 1052 wineries over the period 2006–2015, we find robust evidence of a positive relationship between product quality, measured by the wineries’ reputation for quality, and profits, measured by the Earnings Before Interest, Depreciation and Amortization. By contrast, we observe no relationship between reputation and profitability, measured by the Return on Invested Capital.

Suggested Citation

  • Castriota Stefano & Fedele Alessandro, 2024. "Does Excellence Pay Off? Evidence from the Italian Wine Market," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 24(1), pages 259-283, January.
    • Handle: RePEc:bpj:bejeap:v:24:y:2024:i:1:p:259-283:n:7
    DOI: 10.1515/bejeap-2023-0243
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    More about this item

    Keywords

    product quality; firm profits; firm profitability; wine market;
    All these keywords.

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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