This study investigates how the inevitable disclosure doctrine, a form of trade secret legal protection, affects venture capital (VC) investment. Using a data set of VC deals realized in the United States from 1980 to 2012, we find that a rule in favor of inevitable disclosure increases the amount of VC investment. We address mechanisms that can explain these findings by assessing how the inevitable disclosure doctrine (a) displays a different impact on VC investments according to the characteristics of the state and the industry where the start-ups operate and (b) affects the performance of VC-backed firms. We also discuss managerial and policy implications of our findings. Link to the article
CASTELLANETA, F., CONTI, R., VELOSO, F.M. and KEMENY, C.A. (2016). The effect of trade secret legal protection on venture capital investments: Evidence from the inevitable disclosure doctrine. Journal of Business Venturing, 31(5), pp. 524-541.