JOURNAL OF ACCOUNTING AND FINANCE
Trade Secrets Protection and Corporate Tax Avoidance
Author(s): Hamid Sakaki, Karn Thapar
Citation: Hamid Sakaki, Karn Thapar, (2018) "Trade Secrets Protection and Corporate Tax Avoidance", Journal of Accounting and Finance, Vol. 18, ss. 4, pp. 114-132
Article Type: Research paper
Publisher: North American Business Press
Abstract:
This paper examines the relationship between an increase in legislative trade secrets protection and its
effect on tax avoidance. First, we show that the adoption of the UTSA, by itself, does not have any effect on tax avoidance activities by firms located in UTSA states. However, our research demonstrates a negative association between large firms located in UTSA states and the accompanying tax avoidance by these firms. Additionally, we document the differences in tax avoidance activities by companies in different industries. Namely, we find that large high-technology companies engage in less tax avoidance as compared to companies in other industries.