Trade secrets leakage risk and firm innovation: Evidence from third-party disclosure of Chinese listed firms' online sales data

Based on a natural experiment in which a third party disclosed online sales data from selected listed firms in China, this article uses a difference-in-differences (DID) model to examine the effect of trade secrets leakage risk on firm innovation. We find that leakage risk significantly reduces firm innovation. We also find that the results are more pronounced in non-technology-intensive firms and those with a higher degree of digital transformation, compete in more competitive markets, have stronger internal governance and higher financing constraints. Our findings have important implications for protecting trade secrets in the digital economy.