Policy tolerance of economic crime? An empirical analysis of the effect of counterfeiting on italian trade
adverse effects on competition and legal businesses; on the other hand, there are benefits through
(shadow) employment and income in less-developed areas, as well as benefits through relations of
political clientage. We focus on counterfeiting and its economic effects on trade in Italy during the
economic crisis. Using a newly built regional dataset and a dynamic panel model, we find evidence
of the dual impact of counterfeiting. The production (and exchange) of fake goods depresses the