Question

In: Economics

Counterfeiting and piracy both represent serious problems for firms doing significant business internationally, however, their impact...

Counterfeiting and piracy both represent serious problems for firms doing significant business internationally, however, their impact on the firm is substantially different.

T/F

Solutions

Expert Solution

True,

Counterfeiting and piracy are terms used to describe a range of activity illicit, linked to (IPR) intellectual property rights infringement.

Impact on the firm is substantially different because counterfeiters and pirates target products where margin profit are high.

Counterfeiting and piracy are illicit activities in which network criminal and organised crime thrive. Items that they are other pirates and counterfeiters produce are often substandard (even dangerous), posing health and safety risks to consumers that range from life tomild - threatening. The illegal activities undermine innovation, which is key to economic growth.

The gains (economic) that some consumers experience by purchasing lower-priced  counterfeit or pirated products need to be considered in a broader context; many consumers dont experience such gains, they are worse off.  

The effects of counterfeiting and piracy in developing economies are more pronounced , which is where infringing activities tend to be highest, to relatively weak enforcement. If unaddressed, weak enforcement is an issue that could affect relations with trading partners.


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