EU Science Hub

Impact of counterfeiting on the performance of digital technology companies

Counterfeiting activities target companies in various sectors, including digital technology companies, defined as companies that produce and/or commercialize at least one physical product that incorporates a digital technology, excluding the merchandising related to the company brands.


Counterfeiting is a fraudulent activity that potentially damages the economic and innovation performance of companies and can pose major threats to global competition and economic growth. However, the actual impact of counterfeiting on the performance of companies has not been tested empirically, due to methodological problems, including the lack of data on counterfeiting at the firm-level. Furthermore, prior theoretical studies have speculated that counterfeiting could have in part a beneficial effect on the performance of companies, due to indirect advertising, calling for empirical investigations to shed light on the issue.


The goal of the present study is to provide empirical evidence on the impact of counterfeiting on both the economic and innovative performance of digital technology companies at the firm-level and on the global scale. To this aim, a new database was created combining data on counterfeiting activities during 2011-2013 (OECD-EUIPO, 2016) with financial information and patent data from 2009 to 2015.