Knocking off Firm Value
68 Pages Posted: 29 Aug 2018 Last revised: 12 Aug 2020
Date Written: August 12, 2020
We study the valuation implications of one of the most important mechanisms that help firms protect their intangible assets from infringement: government anti-counterfeiting enforcement. We show that the U.S. government’s anti-counterfeiting enforcement in foreign countries positively affects U.S. firms’ intangible assets, earnings, and valuations. Firms significantly reduce capital and research and development investments when their brands and products are protected from counterfeiting activities. Our results demonstrate the importance of the U.S. government’s anti-counterfeiting enforcements on intangible assets and valuations.
Keywords: Intangible asset valuation, enforcement, research and development investment, capital investment, product market competition, counterfeit products, special 301 reports
JEL Classification: G15, G34, G31, M41
Suggested Citation: Suggested Citation