Publication Type
Journal Article
Version
submittedVersion
Publication Date
3-2018
Abstract
This study exploits the staggered adoption of the inevitable disclosure doctrine (IDD) by U.S. state courts as an exogenous shock that generates variations in the proprietary costs of disclosure. We find that firms respond to IDD adoption by reducing the level of disclosure regarding their customers’ identities, supporting the proprietary cost hypothesis. Our results are stronger for firms in industries with a higher degree of entry threats, for firms in more volatile industries, and for firms with a lower degree of external financing dependence. Overall, this study represents one of the first efforts in identifying the causal effect of proprietary costs of disclosure on the supply of disclosure.
Keywords
Proprietary Costs, Corporate Disclosure, Customer Identity, Inevitable Disclosure Doctrine, Trade Secrets Law
Discipline
Accounting | Business and Corporate Communications | Corporate Finance
Research Areas
Corporate Reporting and Disclosure
Publication
Journal of Accounting Research
Volume
56
Issue
1
First Page
265
Last Page
308
ISSN
0021-8456
Identifier
10.1111/1475-679X.12187
Publisher
Wiley: 24 months - No Online Open
Citation
LI, Yinghua; LIN, Yupeng; and ZHANG, Liandong.
Trade secrets law and corporate disclosure: Causal evidence on the proprietary cost hypothesis. (2018). Journal of Accounting Research. 56, (1), 265-308.
Available at: https://ink.library.smu.edu.sg/soa_research/1646
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1111/1475-679X.12187
Included in
Accounting Commons, Business and Corporate Communications Commons, Corporate Finance Commons