American Economic Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
The Not-So-Uniform Effects of Trade Secret Protection on Business Entry
American Economic Journal: Economic Policy
(pp. 192–227)
Abstract
We explore the consequences of trade secret protection for new business formation in the United States. We find the states that adopt the Uniform Trade Secrets Act (UTSA), which enhances intellectual property rights, experience an overall decline in firm and establishment entry rates. This result is driven by the reduction in the establishment entry rates of start-ups and small firms. By contrast, the law increases the establishment entry rates of incumbents and larger firms. The negative impact of the UTSA is larger in industries that rely more on intellectual assets and trade secrets, as well as external-finance-dependent industries.Citation
Leblebicioğlu, Asli, and Tanseli Savaşer. 2025. "The Not-So-Uniform Effects of Trade Secret Protection on Business Entry." American Economic Journal: Economic Policy 17 (4): 192–227. DOI: 10.1257/pol.20220814Additional Materials
JEL Classification
- K11 Property Law
- K22 Business and Securities Law
- L11 Production, Pricing, and Market Structure; Size Distribution of Firms
- M13 New Firms; Startups
- O34 Intellectual Property and Intellectual Capital
- O38 Technological Change: Government Policy