The effects of proprietary information on corporate disclosure and transparency: Evidence from trade secrets

Stephen Glaeser

Journal of Accounting and Economics, 2018, vol. 66, issue 1, 163-193

Abstract: I examine the effects of proprietary information on corporate transparency and voluntary disclosure. To do so, I develop and validate two measures of firms’ reliance on trade secrecy: one based on 10-K disclosures and one based on subsequent litigation outcomes. I complement these measures by using the staggered passage of the Uniform Trade Secrets Act as a shock to trade secrecy. I find that firms that begin to rely more heavily on trade secrecy substitute increased voluntary disclosure of nonproprietary information for decreased disclosure of proprietary information. The total effect of trade secrecy is a decrease in corporate transparency.

Keywords: Proprietary costs; Trade secrets; Disclosure; Information asymmetry; Innovation; Patents (search for similar items in EconPapers)
JEL-codes: D23 G30 O31 O32 O33 O34 O38 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (56)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:66:y:2018:i:1:p:163-193

DOI: 10.1016/j.jacceco.2018.04.002

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