Trade Secret Protection and the Integration of Information Within Firms

• 成果类型: Article
• 署名作者: Andreicovici, Ionela; Bormann, Sara; Hombach, Katharina
• 署名单位: Frankfurt School Finance & Management; Goethe University Frankfurt
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2021.03484
• 发表日期: 2025
• 关键词: trade secret protection; UTSA; information technology; enterprise management system; information integration; internal information environment

摘要

We examine the effect of trade secret protection laws on internal information integration (i.e., the extent to which economic agents are provided with access to decisionrelevant information from other economic agents within a firm). We argue that stronger trade secret protection laws increase firms' internal information integration because they reduce the proprietary costs of information leakage. To test our prediction, we measure a firm's internal information integration by the share of its sites integrated into its enterprise management system. Exploiting the staggered adoption of trade secret protection laws via the Uniform Trade Secrets Act (UTSA), we find that these laws increase firms' internal information integration. This effect is stronger (weaker) for firms with higher proprietary costs (coordination benefits). Further, we provide evidence that the UTSA-induced increase in internal information integration translates into improvements of firms' internal information quality and decision-making quality. Taken together, our results enhance the understanding of the economic trade-offs shaping firms' internal information environment.