Counterfeit Goods and Their Potential Financing of International Terrorism

The production and sales of counterfeit products is an increasingly serious problem in the international trade market. Beyond issues of intellectual property theft and consumer safety, there is the notion that counterfeit sales directly fund terrorist organizations. I use a number of economic controls to analyze the effect of two proxies of annual counterfeit sales on two measures of international terrorism. My findings suggest inconclusive results as the effect of counterfeiting differs significantly between the two terrorism indexes.