Emerald Management Review:
Impacts of entry by counterfeiters

Abstract:

Purpose - To consider the effect of counterfeiting products on industry price and quality when intellectual property rights are weak.

Design/methodology/approach - Cites prior studies of intellectual property rights and their legal protection. Describes a natural experiment from the Chinese footwear and fashion industries, where enforcement of rights was largely withdrawn in 1995. Samples 31 footwear firms and their speed of compliance with ISO certification in 2004, and correlates with firm characteristics. Takes annual reports, product catalogues, and census data, to collect counterfeir production data, prices and costs from 1993 to 2004.

Findings - Finds that the number of counterfeiters soared in 1995, and incumbent firms invested in self-enforcement, in improving quality, raising prices and entering retail distribution. Notes those not targeted changed quality and price gradually. Adds that firms that were attacked tended to be laggard ISO compliers.

Research limitations/implications - Proposes seeking other strategies and policies, and more data, in other sectors and countries.

Practical implications - Argues that firms wanting protection should have a good relationship with government,

Originality/value - Presents impressive detective work in a difficult economic area with fugitive data.

Keywords:

Article Type:

Research paper

Reference:

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