Geographical indicators (GIs) are collective property rights, which identify a commodity as originating from a specific region. Both the quality and the reputation of these commodities are considered to be attributable to their geographic origin, and therefore their names refer to their region of production. The vast majority of GI:s consists of foodstuff products and originates from Europe; famous examples are Prosciutto di Parma and Roqeufort cheese. The EU claims that the protection of GI labeling contributes to rural development by allowing farmers to signal to consumers the value and quality of their products. The argument is that when goods are associated with the regions in which they are produced, they represent an immobile comparative advantage which can be used to spur economic activity in remote and/or underprivileged areas, since GI labeling generates a certain degree of market power which can be exploited by the producers. This report analyses the influence of GI production on rural development in the EU. It is found that the production of GI products in some cases have contributed to rural development, especially for the most well-known products, although the experience differs between regions and products.