Graduation Year

2017

Date of Submission

12-2016

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics-Accounting

Reader 1

Marc Massoud

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© 2016 Amanda Wilson

Abstract

The counterfeiting industry continues to grow worldwide, valued today at $461 billion according to the Global IP Center’s 2016 Report. This proliferation of counterfeiting has permeated many industries, but poses a unique threat to the luxury retail sector. Many factors have precipitated the expansion of this industry: expanded trade and manufacturing networks, enhanced technology, the rise of e-commerce, the globalization of trade, and others. Long viewed as a necessary evil in the luxury business, this booming counterfeit industry threatens retailers and governments alike. For individual retailers, counterfeiting deprives them of revenues, increases anti-counterfeiting expenses, devalues the brand, and disincentivizes growth and innovation. As a result, governments suffer slowed economic growth, higher unemployment and decreased tax revenues. Despite the economic and accounting consequences of luxury counterfeiting, steps can be taken to mitigate its impact. Legislation that defines and protects intellectual property rights, brand enforcement tools, supply chain management, public and private sector partnerships, authentication technology and consumer education present opportunities for building a strong anti-counterfeiting strategy.

My research examines the luxury counterfeiting industry from its origins, investigating its history and the reasons for its rise in current global conditions. Taking an accounting-based perspective, I address both the ramifications of the luxury counterfeiting industry and propose strategies to combat it. Curtailing the expansion of this lucrative, black-market industry will be difficult and costly for luxury retailers and governments alike, but given the growing threat it poses around the world, it is in their best interest to pursue some of these proposed strategies.

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