Economic Outcomes of Corporate Espionage
DOI:
https://doi.org/10.33423/jabe.v22i3.2862Keywords:
Business, Economics, Corporate Espionage, price reaction, information, economic consequencesAbstract
This paper investigates the economic outcomes of corporate espionage (also known as trade secrets) lawsuits. Utilizing 137 hand-collected trade secret cases, we find significantly positive (negative) abnormal returns for the favorable (unfavorable) court decisions up to 5 days around the court decision dates. Our findings are consistent with two hypotheses: information leaking before the event and investor overreaction/underreaction on and after the event days. Our analysis on firm fundamentals show that the consequences of losing trade secret lawsuits are long-lasting. The findings indicate that the punishment incorporated by the market is more severe for the losing firms.
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Published
2020-07-29
How to Cite
Li, C., Liu, Y., & Wang, X. (2020). Economic Outcomes of Corporate Espionage. Journal of Applied Business and Economics, 22(3). https://doi.org/10.33423/jabe.v22i3.2862
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