 Trade secret protection, multinational firms and international tradeInternational Economics, 2023, vol. 173, issue C, 325-342 Abstract: Multinational firms indicate that the threat of trade secret misappropriation by current and former employees remains a substantial impediment to conducting business in emerging markets. In this paper, I examine the economic implications of strengthening international standards in trade secret protection. I develop a general equilibrium model featuring heterogeneous firms that differ in the degree to which they must expose employees to trade secrets. To prevent employee misappropriation, firms offer incentive compatible wage premiums based on their individual exposure and the common level of legal protection. Entry selection into the international market generates an endogenous distribution of firm specific wages and positive unemployment in equilibrium. I find that stronger protection stimulates multinational investment and increases aggregate productivity. However, distributional effects leave many workers worse-off. Keywords: Trade secrets; Intellectual property rights; Multinational firms; Development (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:inteco:v:173:y:2023:i:c:p:325-342 DOI: 10.1016/j.inteco.2023.01.007 Access Statistics for this article International Economics is currently edited by Valerie Mignon and Marcelo Olarreaga More articles in International Economics from Elsevier |
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