Does Excellence Pay Off? Evidence from the Italian Wine Market

Castriota Stefano () and Alessandro Fedele
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Castriota Stefano: Dipartimento di Scienze Politiche, Università di Pisa, Pisa, Italy

The B.E. Journal of Economic Analysis & Policy, 2024, vol. 24, issue 1, 259-283

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.

Keywords: product quality; firm profits; firm profitability; wine market (search for similar items in EconPapers)
JEL-codes: D22 L15 L66 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1515/bejeap-2023-0243

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