The Not So Uniform Effect of Trade Secret Protection on Business Entry
by Tanseli Savaşer
Place: Faculty of Business Administration,
Ümit Berkman Seminar Room (MA-330)
Meeting ID: 683 469 0808
We explore the consequences of trade secret protection for new business formation in the U.S. We find that the states that adopt the Uniform Trade Secrets Act (UTSA), which enhances intellectual property rights, experience an overall decline in establishment entry rates. This result is driven by the reduction in small business entry rates. The negative effect is more pronounced in industries that are knowledge and trade secret intensive. By contrast, the law promotes the entry of medium and large businesses. Our findings highlight the important relationship between the regulatory environment governing intellectual property protection and business formation in the U.S.