A relational approach to counterfeit reduction: evidence from China

Abstract

Counterfeiting is a complex, institutional-ridden phenomenon particularly prevalent in emerging markets such as China. Applying the institutional theory, this study examines how relational mechanisms (with distributors and governments) may lead to counterfeit reduction. Through a multi-informant survey (directors and marketing managers) from 271 foreign firms in China, we depict the interplay between firms’ relational ties and appropriate internal mechanisms on counterfeit reduction. We theorize that firms can leverage distributor and government ties to curtail counterfeiting; yet they should simultaneously align internal mechanisms that correspond to the time orientation of different relational ties such that embedded values in the two relationships can be effectively extracted for better counterfeit reduction outcomes.