Trade Secret Protection and the Integration of Information Within Firms

Published Online:https://doi.org/10.1287/mnsc.2021.03484

References

  • Abernethy M, Bouwens J (2005) Determinants of accounting innovation implementation. Abacus 41(3):217–240.CrossrefGoogle Scholar
  • Aboody D, Lev B (2000) Information asymmetry, R&D, and insider gains. J. Finance 55(6):2747–2766.CrossrefGoogle Scholar
  • Acharya A, Blackwell M, Sen M (2016) Explaining causal findings without bias: Detecting and assessing direct effects. Amer. Political Sci. Rev. 110(3):512–529.CrossrefGoogle Scholar
  • Ahmad A, Bosua R, Scheepers R (2014) Protecting organizational competitive advantage: A knowledge leakage perspective. Comput. Security 42(May):27–39.CrossrefGoogle Scholar
  • Almeling DS, Snyder DW, Sapoznikow M, McColluman WE, Weader J (2010) A statistical analysis of trade secret litigation in state courts. Gonzaga Law Rev. 46(1):57–101.Google Scholar
  • Amiraslani H, Deller C, Ittner C, Keusch T (2024) The importance of directors’ information access: Evidence from board risk reporting. Working paper, INSEAD, Fontainebleau, France.Google Scholar
  • Anderson MC, Banker RD, Ravindran S (2006) Value implications of investments in information technology. Management Sci. 52(9):1359–1376.LinkGoogle Scholar
  • Anderson SW, Christ MH, Dekker HC, Sedatole KL (2014) The use of management controls to mitigate risk in strategic alliances: Field and survey evidence. J. Management Accounting Res. 26(1):1–32.CrossrefGoogle Scholar
  • Arundel A (2001) The relative effectiveness of patents and secrecy for appropriation. Res. Policy 30(4):611–624.CrossrefGoogle Scholar
  • Asker J, Ljungqvist A (2010) Competition and the structure of vertical relationships in capital markets. J. Political Econom. 118(3):599–647.CrossrefGoogle Scholar
  • Auchard E (2018) Study warns of cyber hacking risk to firms using SAP, Oracle management software. Insurance J. (July 25), https://www.insurancejournal.com/news/national/2018/07/25/495977.htm.Google Scholar
  • Baldwin CY, Henkel J (2015) Modularity and intellectual property protection. Strategic Management J. 36(11):1637–1655.CrossrefGoogle Scholar
  • Barrios JM (2022) Occupational licensing and accountant quality: Evidence from the 150‐hour rule. J. Accounting Res. 60(1):3–43.CrossrefGoogle Scholar
  • Beaudry P, Doms M, Lewis E (2010) Should the personal computer be considered a technological revolution? Evidence from U.S. metropolitan areas. J. Political Econom. 118(5):988–1036.CrossrefGoogle Scholar
  • Bens DA, Berger PG, Monahan SJ (2011) Discretionary disclosure in financial reporting: An examination comparing internal firm data to externally reported segment data. Accounting Rev. 86(2):417–449.CrossrefGoogle Scholar
  • Berger PG, Hann RN (2007) Segment profitability and the proprietary and agency costs of disclosure. Accounting Rev. 82(4):869–906.CrossrefGoogle Scholar
  • Berman DL, Otterberg AA, Maleson JA, Salander AM, Hersh AJ (2017) Understanding and litigating trade secrets. Accessed February 22, 2023, https://www.jenner.com/a/web/ejymw5kQ4aThswmb7tntdh/4HRMZQ/Trade_Secrets_Outline_0617_PRINT.PDF?1497540235.Google Scholar
  • Bills KL, Cobabe M, Pittman J, Stein SE (2020) To share or not to share: The importance of peer firm similarity to auditor choice. Accounting Organ. Soc. 83(May):101115.CrossrefGoogle Scholar
  • Bloom N, Garicano L, Sadun R, Van Reenen J (2014) The distinct effects of information technology and communication technology on firm organization. Management Sci. 60(12):2859–2885.LinkGoogle Scholar
  • Bouwens J, Abernethy MA (2000) The consequences of customization on management accounting system design. Accounting Organ. Soc. 25(3):221–241.CrossrefGoogle Scholar
  • Brazel JF, Dang L (2008) The effect of ERP system implementations on the management of earnings and earnings release dates. J. Inform. Systems 22(2):1–21.CrossrefGoogle Scholar
  • Busenbark JR, Yoon H, Gamache DL, Withers MC (2022) Omitted variable bias: Examining management research with the impact threshold of a confounding variable (ITCV). J. Management 48(1):17–48.CrossrefGoogle Scholar
  • Cabezon F, Hoberg G (2022) Leaky director networks and innovation herding. Working paper, Virginia Tech Pamplin College of Business, Blacksburg, VA.Google Scholar
  • Cameron A, Gelbach J, Miller D (2008) Bootstrap-based improvements for inference with clustered errors. Rev. Econom. Statist. 90(3):414–427.CrossrefGoogle Scholar
  • Cao SS, Ma G, Tucker JW, Wan C (2018) Technological peer pressure and product disclosure. Accounting Rev. 93(6):95–126.CrossrefGoogle Scholar
  • Cassar G, Gibson B (2008) Budgets, internal reports, and manager forecast accuracy. Contemporary Accounting Res. 25(3):707–738.CrossrefGoogle Scholar
  • Castellaneta F, Conti R, Kacperczyk A (2017) Money secrets: How does trade secret legal protection affect firm market value? Evidence from the uniform trade secret act. Strategic Management J. 38(4):834–853.CrossrefGoogle Scholar
  • Cengiz D, Dube A, Lindner A, Zipperer B (2019) the effect of minimum wages on low-wage jobs. Quart. J. Econom. 134(3):1405–1454.CrossrefGoogle Scholar
  • Chen X, Hilary G, Tian X (2019) Data breach disclosure and insider trading. Working paper, McDonough School of Business, Georgetown University, Washington, DC.Google Scholar
  • Chen HM, Francis BB, Hasan T, Wu Q (2022) Does Corporate culture impact audit pricing? Evidence from textual analysis. J. Bus. Finance Accounting 49(5–6):778–806.CrossrefGoogle Scholar
  • Chen C, Martin X, Roychowdhury S, Wang X, Billett MT (2018) Clarity begins at home: Internal information asymmetry and external communication quality. Accounting Rev. 93(1):71–101.CrossrefGoogle Scholar
  • Cheng Z, Rai A, Tian F, Xu SX (2021) Social learning in information technology investment: The role of board interlocks. Management Sci. 67(1):547–576.LinkGoogle Scholar
  • Cheng L, Li Y, Li W, Holm E, Zhai Q (2013) Understanding the violation of IS security policy in organizations: An integrated model based on social control and deterrence theory. Comput. Security 39(November):447–459.CrossrefGoogle Scholar
  • Chenhall RH, Morris D (1986) The impact of structure, environment, and interdependence on the perceived usefulness of management accounting systems. Accounting Rev. 61(1):16–35.Google Scholar
  • Christ MH, Nicolaou AI (2016) Integrated information systems, alliance formation, and the risk of information exchange between partners. J. Management Accounting Res. 28(3):1–18.CrossrefGoogle Scholar
  • Clemons EK, Hitt LM (2004) Poaching and the misappropriation of information: Transaction risks of information exchange. J. Management Inform. Systems 21(2):87–107.CrossrefGoogle Scholar
  • Cohen W, Nelson R, Walsh J (2000) Protecting their intellectual assets: Appropriability conditions and why U.S. manufacturing firms patent (or not). NBER working paper, National Bureau of Economic Research, Cambridge, MA.Google Scholar
  • Conley T, Taber CR (2011) Inference with “difference in differences” with a small number of policy changes. Rev. Econom. Statist. 93(1):113–125.CrossrefGoogle Scholar
  • Contigiani A, Hsu DH, Barankay I (2018) Trade secrets and innovation: Evidence from the “inevitable disclosure” doctrine. Strategic Management J. 39(11):2921–2942.CrossrefGoogle Scholar
  • Davila A, Foster G (2005) Management accounting systems adoption decisions: Evidence and performance implications from early-stage startup companies. Accounting Rev. 80(4):1039–1068.CrossrefGoogle Scholar
  • Dechow PM, Dichev ID (2002) The quality of accruals and earnings: The role of accrual estimation errors. Accounting Rev. 77(1):35–59.CrossrefGoogle Scholar
  • deHaan E (2021) Using and interpreting fixed effects models. Working paper, Stanford Graduate School of Business, Standford, CA.Google Scholar
  • Dewan S, Michael SC, Min C-k (1998) Firm characteristics and investments in information technology: Scale and scope effects. Inform. Systems Res. 9(3):219–232.LinkGoogle Scholar
  • Dorantes C-A, Li C, Peters GF, Richardson VJ (2013) The effect of enterprise systems implementation on the firm information environment. Contemporary Accounting Res. 30(4):1427–1461.CrossrefGoogle Scholar
  • Drake MS, Hess RV, Wilde JH, Williams BM (2022) The relevance of non‐income tax relief. Contemporary Accounting Res. 39(3):1797–1833.CrossrefGoogle Scholar
  • Eisenhardt KM, Martin JA (2000) Dynamic capabilities: What are they? Strategic Management J. 21(10/11):1105–1121.CrossrefGoogle Scholar
  • Elliott K, Patacconi A, Swierzbinski J, Williams J (2019) Knowledge protection in firms: A conceptual framework and evidence from HP Labs. Eur. Management Rev. 16(1):179–193.CrossrefGoogle Scholar
  • Fiechter P, Hitz JM, Lehmann N (2022) Real effects of a widespread CSR reporting mandate: Evidence from the European Union’s CSR Directive. J. Accounting Res. 60(4):1499–1549.CrossrefGoogle Scholar
  • Forman C (2005) The corporate digital divide: Determinants of internet adoption. Management Sci. 51(4):641–654.LinkGoogle Scholar
  • Forman C, Van Zeebroeck N (2012) From wires to partners: How the internet has fostered R&D collaborations within firms. Management Sci. 58(8):1549–1568.LinkGoogle Scholar
  • Francis J, Schipper K (1999) Have financial statements lost their relevance? J. Accounting Res. 37(2):319–352.CrossrefGoogle Scholar
  • Frank KA (2000) Impact of a confounding variable on a regression coefficient. Sociol. Methods Res. 29(2):147–194.CrossrefGoogle Scholar
  • Franzoni LA, Kaushik A (2016) The optimal scope of trade secrets law. Internat. Rev. Law Econom. 45(C):45–53.CrossrefGoogle Scholar
  • Frésard L, Hoberg G, Phillips GM (2020) Innovation activities and integration through vertical acquisitions. Rev. Financial Stud. 33(7):2937–2976.CrossrefGoogle Scholar
  • Gallemore J, Labro E (2015) The importance of the internal information environment for tax avoidance. J. Accounting Econom. 60(1):149–167.CrossrefGoogle Scholar
  • Garmaise MJ (2011) Ties that truly bind: Noncompetition agreements, executive compensation, and firm investment. J. Law Econom. Organ. 27(2):376–425.CrossrefGoogle Scholar
  • Glaeser S (2018) The effects of proprietary information on corporate disclosure and transparency: Evidence from trade secrets. J. Accounting Econom. 66(1):163–193.CrossrefGoogle Scholar
  • Glaeser CK, Glaeser S, Labro E (2023) Proximity and the management of innovation. Management Sci. 69(5):3080–3099.LinkGoogle Scholar
  • Godigbe BG, Jennings J, Seo H, Tanlu L (2022) The effect of geographic diversity on managerial earnings forecasts. Eur. Accounting Rev., ePub ahead of print November 4, https://doi.org/10.1080/09638180.2022.2139738.Google Scholar
  • Goodman TH, Neamtiu M, Shroff N, White HD (2014) Management forecast quality and capital investment decisions. Accounting Rev. 89(1):331–365.CrossrefGoogle Scholar
  • Gormley TA, Matsa DA (2014) Common errors: How to (and not to) control for unobserved heterogeneity. Rev. Financial Stud. 27(2):617–661.CrossrefGoogle Scholar
  • Granlund M, Malmi T (2002) Moderate impact of ERPS on management accounting: A lag or permanent outcome? Management Accounting Res. 13(3):299–321.CrossrefGoogle Scholar
  • Ham JC, Ueda K (2021) The employment impact of the provision of public health insurance: A further examination of the effect of the 2005 TennCare contraction. J. Labor Econom. 39(S1):S199–S238.CrossrefGoogle Scholar
  • Hannah D (2005) Should I keep a secret? The effects of trade secret protection procedures on employees’ obligations to protect trade secrets. Organ. Sci. 16(1):71–84.LinkGoogle Scholar
  • Heitzman S, Huang M (2019) Internal information quality and the sensitivity of investment to market prices and accounting profits. Contemporary Accounting Res. 36(3):1699–1723.CrossrefGoogle Scholar
  • Hellmann T, Perotti E (2011) The circulation of ideas in firms and markets. Management Sci. 57(10):1813–1826.LinkGoogle Scholar
  • Hendricks KB, Singhal VR, Stratman JK (2007) The impact of enterprise systems on corporate performance: A study of ERP, SCM, and CRM system implementations. J. Oper. Management 25(1):65–82.CrossrefGoogle Scholar
  • Hennes KM, Leone AJ, Miller BP (2008) The importance of distinguishing errors from irregularities in restatement research: The case of restatements and CEO/CFO. Accounting Rev. 83(6):1487–1519.CrossrefGoogle Scholar
  • Huang K, Lao B, McPhee G (2020) Internal information quality and patent‐related innovation. J. Bus. Finance Accounting 47(3–4):489–518.CrossrefGoogle Scholar
  • Huth CL, Chadwick DW, Claycomb WR, You I (2013) Guest editorial: A brief overview of data leakage and insider threats. Inform. Systems Frontiers 15(1):1–4.CrossrefGoogle Scholar
  • Imrohoroglu A, Tuzel S (2014) Firm-level productivity, risk, and return. Management Sci. 60(8):2073–2090.LinkGoogle Scholar
  • InfoWatch (2006) Internal IT threats in Europe 2006. Accessed February 22, 2023, https://securelist.com/internal-it-threats-in-europe-2006/36142/.Google Scholar
  • InfoWatch (2014) Global Data Leakage Report 2013. Accessed February 22, 2023, https://infowatch.com/analytics/reports/3641.Google Scholar
  • InfoWatch (2018) Insiders compromise three times more data in H1 2018. Accessed April 20, 2024, https://infowatch.com/news/insiders-compromised-three-times-more-data-first-half-two-thousand-eighteen.Google Scholar
  • Ittner CD, Lanen WN, Larcker DF (2002) The association between activity-based costing and manufacturing performance. J. Accounting Res. 40(3):711–726.CrossrefGoogle Scholar
  • Jennings JN, Kim JM, Lee JA, Taylor D (2023) Measurement error, fixed effects, and false positives in accounting research. Rev. Accounting Stud., ePub ahead of print March 14, https://doi.org/10.1007/s11142-023-09754-z.Google Scholar
  • Jones H (2014) Pitfalls of choice of law clauses in employment contracts. Accessed February 22, 2023, https://hr.blr.com/HR-news/Staffing-Training/Employment-Contracts/Pitfalls-of-choice-of-law-clauses-in-employment-co/.Google Scholar
  • Jung B, Lee WJ, Weber DP (2014) Financial reporting quality and labor investment efficiency. Contemporary Accounting Res. 31(4):1047–1076.CrossrefGoogle Scholar
  • Kamiya S, Kang JK, Kim J, Milidonis A, Stulz RM (2021) Risk management, firm reputation, and the impact of successful cyberattacks on target firms. J. Financial Econom. 139(3):719–749.CrossrefGoogle Scholar
  • Kim Y, Su L, Wang Z, Wu H (2021) The effect of trade secrets law on stock price synchronicity: Evidence from the inevitable disclosure doctrine. Accounting Rev. 96(1):325–348.CrossrefGoogle Scholar
  • Klasa S, Ortiz-Molina H, Serfling M, Srinivasan S (2018) Protection of trade secrets and capital structure decisions. J. Financial Econom. 128(2):266–286.CrossrefGoogle Scholar
  • Kleis L, Chwelos P, Ramirez RV, Cockburn I (2012) Information technology and intangible output: The impact of IT investment on innovation productivity. Inform. Systems Res. 23(1):42–59.LinkGoogle Scholar
  • Labro E, Omartian JD (2021) Managing employee retention concerns: Evidence from US Census data. Working paper, University of North Carolina at Chapel Hill, Chapel Hill, NC.Google Scholar
  • Labro E, Stice-Lawrence L (2020) Updating accounting systems: Longitudinal evidence from the healthcare sector. Management Sci. 66(12):6042–6061.LinkGoogle Scholar
  • Labro E, Peter CD, Pierk J, Van Linden C (2022) In-network auditors as information intermediaries within business groups. Working paper, University of North Carolina at Chapel Hill, Chapel Hill, NC.Google Scholar
  • Larcker DF, Rusticus TO (2010) On the use of instrumental variables in accounting research. J. Accounting Econom. 49(3):186–205.CrossrefGoogle Scholar
  • Li Y, Li Y (2020) The effect of trade secrets protection on disclosure of forward‐looking financial information. J. Bus. Finance Accounting 47(3–4):397–437.CrossrefGoogle Scholar
  • Li SX, Sandino T (2018) Effects of an information sharing system on employee creativity, engagement, and performance. J. Accounting Res. 56(2):713–747.CrossrefGoogle Scholar
  • Li Y, Lin Y, Zhang L (2018) Trade secrets law and corporate disclosure: Causal evidence on the proprietary cost hypothesis. J. Accounting Res. 56(1):265–308.CrossrefGoogle Scholar
  • Li F, Lundholm R, Minnis M (2013) A measure of competition based on 10-K filings. J. Accounting Res. 51(2):399–436.CrossrefGoogle Scholar
  • Liebeskind JP (1996) Knowledge, strategy, and the theory of the firm: Knowledge, strategy, and the theory of the firm. Strategic Management J. 17(S2):93–107.CrossrefGoogle Scholar
  • Liebeskind JP (1997) Keeping organizational secrets: Protective institutional mechanisms and their costs. Indust. Corporate Change 6(3):623–663.CrossrefGoogle Scholar
  • Lyle MR (2019) Information quality, growth options, and average future stock returns. Accounting Rev. 94(1):271–298.CrossrefGoogle Scholar
  • MacKinnon JG, Webb MD (2019) Wild bootstrap randomization inference for few treated clusters. Huynh KP, Jacho-Chávez DT, Tripathi G, eds. The Econometrics of Complex Survey Data, vol. 39 (Emerald Publishing Limited, Leeds, UK), 61–85.CrossrefGoogle Scholar
  • Molok NNA, Ahmad A, Chang S (2018) A case analysis of securing organisations against information leakage through online social networking. Internat. J. Inform. Management 43(December):351–356.CrossrefGoogle Scholar
  • Morris JJ (2011) The impact of enterprise resource planning (ERP) systems on the effectiveness of internal controls over financial reporting. J. Inform. Systems 25(1):129–157.CrossrefGoogle Scholar
  • Morris MG, Venkatesh V (2010) Job characteristics and job satisfaction: Understanding the role of enterprise resource planning system implementation. MIS Quart. 34(1):143–161.CrossrefGoogle Scholar
  • Nagle F (2019) Open source software and firm productivity. Management Sci. 65(3):1191–1215.LinkGoogle Scholar
  • National Science Foundation, National Center for Science and Engineering Statistics (2015) Business research and development and innovation: 2012. Working paper, National Science Foundation, Alexandria, VA.Google Scholar
  • Peng GC, Gala CJ (2014) Cloud ERP: A new dilemma to modern organisations? J. Comput. Inform. Systems 54(3):22–30.CrossrefGoogle Scholar
  • Pierri N, Timmer Y (2020) Tech in fin before fintech: Blessing or curse for financial stability? Working paper, Center for Economic Studies and ifo Institute (CESifo), Munich, Germany.Google Scholar
  • Pincus M, Tian F, Wellmeyer P, Xu SX (2017) Do clients’ enterprise systems affect audit quality and efficiency? Contemporary Accounting Res. 34(4):1975–2021.CrossrefGoogle Scholar
  • Pinnuck M, Lillis AM (2007) Profits vs. losses: Does reporting an accounting loss act as a heuristic trigger to exercise the abandonment option and divest employees? Accounting Rev. 82(4):1031–1053.CrossrefGoogle Scholar
  • Png I (2017a) Law and innovation: Evidence from state trade secrets laws. Rev. Econom. Statist. 99(1):167–179.CrossrefGoogle Scholar
  • Png I (2017b) Secrecy and patents: Theory and evidence from the Uniform Trade Secrets Act. Strategy Sci. 2(3):176–193.LinkGoogle Scholar
  • Pooley J (1997) Trade Secrets (Law Journal Press, New York).Google Scholar
  • Porter JD (2016) Determining choice of law in civil litigation. Accessed February 22, 2023, https://www.jdporterlaw.com/285-2/determining-choice-law-civil-litigation/.Google Scholar
  • Qiu B, Wang T (2018) Does knowledge protection benefit shareholders? Evidence from stock market reaction and firm investment in knowledge assets. J. Financial Quant. Anal. 53(3):1341–1370.CrossrefGoogle Scholar
  • Ranganathan C, Brown CV (2006) ERP investments and the market value of firms: Toward an understanding of influential ERP project variables. Inform. Systems Res. 17(2):145–161.LinkGoogle Scholar
  • Ribstein LE, Kobayashi BH (1996) An economic analysis of uniform state laws. J. Legal Stud. 25(1):131–199.CrossrefGoogle Scholar
  • Robertson KM, Hannah DR, Lautsch BA (2015) The secret to protecting trade secrets: How to create positive secrecy climates in organizations. Bus. Horizons 58(6):669–677.CrossrefGoogle Scholar
  • Romanosky S, Telang R, Acquisti A (2011) Do data breach disclosure laws reduce identity theft? J. Policy Anal. Management 30(2):256–286.CrossrefGoogle Scholar
  • Ronde T (2001) Trade secrets and information sharing. J. Econom. Management Strategy 10(3):391–417.CrossrefGoogle Scholar
  • Setia P, Setia M, Krishnan R, Sambamurthy V (2011) The effects of the assimilation and use of IT applications on financial performance in healthcare organizations. J. Assoc. Inform. Systems 12(3):274–298.Google Scholar
  • Shapiro RJ, Hassett KA (2005) The economic value of intellectual property. Accessed April 22, 2024, https://www.sonecon.com/docs/studies/IntellectualPropertyReport-October2005.pdf.Google Scholar
  • Steinmeyer PA, Becker E, Green PC, Jackson ZC (2019) Trade secret litigation. Practical law note published by Thomson Reuters. https://uk.practicallaw.thomsonreuters.com/5-523-8283?contextData=(sc.Default)&transitionType=Default&firstPage=true.Google Scholar
  • The Commission on the Theft of American Intellectual Property (2017) Update to the IP Commission Report. The theft of American intellectual property: Reassessments of the challenge and United States policy, NBER Working Paper, National Bureau of Economic Research, Cambridge, MA.Google Scholar
  • Tian F, Xu SX (2015) How do enterprise resource planning systems affect firm risk? Post-implementation impact. MIS Quart. 39(1):39–60.CrossrefGoogle Scholar
  • U.S. Chamber of Commerce (2016) The case for enhanced protection of trade secrets in the trans-pacific partnership agreement. Working paper, U.S. Chamber of Commerce, Washington, DC.Google Scholar
  • von Rheinbaben J, Ruckes M (2004) The number and the closeness of bank relationships. J. Banking Finance 28(7):1597–1615.CrossrefGoogle Scholar
  • Wang J, Burke K (2022) The effects of disclosure and enforcement on payday lending in Texas. J. Financial Econom. 145(2):489–507.CrossrefGoogle Scholar
  • Wong WP, Tan HC, Tan KH, Tseng M-L (2019) Human factors in information leakage: Mitigation strategies for information sharing integrity. Indust. Management Data Systems 119(6):1242–1267.CrossrefGoogle Scholar
  • Zhao XS, Lynch JG, Chen QM (2010) Reconsidering Baron and Kenny: Myths and truths about mediation analysis. J. Consumer Res. 37(2):197–206.CrossrefGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.