By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.
We explore the consequences of trade secret protection for new
business formation in the U.S. 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 startups 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.
