Abstract In an increasingly competitive global market, Protected Designation of Origin (PDO) quality schemes serve as vital strategic tools for product differentiation and regional economic sustainability. This study examines the impact of PDO certification on firm profitability by analyzing a unique panel dataset of 202 Spanish olive oil mills over the 2014–2022 period. Using the DuPont model and a random-effects regression, the analysis investigates how these quality labels influence financial performance and whether this effect varies according to firm size. The results show that PDO certification does not universally improve profitability; its benefits are most significant for smaller mills that leverage the label to achieve premium pricing and enhance consumer trust. Conversely, the positive effects diminish when certification is used primarily for volume-based competition without a clear quality signaling strategy. These findings provide critical insights for mill managers and regulatory councils, suggesting that the economic value of a PDO depends on its integration into a coherent, quality-focused marketing strategy. Furthermore, the results inform policymakers on the effectiveness of quality schemes as instruments for the economic sustainability of small-scale producers within rural development and Common Agricultural Policy frameworks.
Puiggené et al. (Thu,) studied this question.