Trade Secret Protection and Firm Acquisitions: Evidence from the Uniform Trade Secrets Act

Marta Fernandez De Arroyabe Arranz, Christoph Grimpe, Katrin Hussinger

Research output: Chapter in Book/Report/Conference proceedingConference abstract in proceedingsResearchpeer-review

Abstract

Strategic factor markets allow firms to access knowledge and technology, yet their institutional underpinnings and the effect of changes in the institutional framework on firm behavior are poorly understood. We address a change in institutions regarding the strength of trade secret protection, more specifically the staggered implementation of the Uniform Trade Secrets Act (UTSA) in the U.S. We show that stronger trade secret protection increases the likelihood of firms to engage on the market for corporate control, a consequence unintended by the UTSA. We identify two mechanisms. First, the UTSA limits knowledge outflows through employee mobility which makes knowledge-intensive firms more attractive acquisition targets. Second, stronger trade secret protection grants acquiring firms better protection of the acquired knowledge and technology

Original languageEnglish
Title of host publicationProceedings of the Eighty-second Annual Meeting of the Academy of Management
EditorsSonja Taneja
Number of pages1
Place of PublicationBriarcliff Manor, NY
PublisherAcademy of Management
Publication date2022
Pages1939
DOIs
Publication statusPublished - 2022
EventThe Academy of Management Annual Meeting 2022: Creating a Better World Together - Seattle, United States
Duration: 5 Aug 20229 Aug 2022
Conference number: 82
https://2022.aom.org/

Conference

ConferenceThe Academy of Management Annual Meeting 2022
Number82
Country/TerritoryUnited States
CitySeattle
Period05/08/202209/08/2022
Internet address
SeriesAcademy of Management Proceedings
ISSN0065-0668

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