Coyotes are territorial and mark their territories with urine. There are plenty of studies that show predator urine keeps prey away (such as keeping deer away from a garden with coyote urine). And using territorial marking has worked in repelling African wild dogs. But the trick doesn’t appear to work with coyotes.
A study reported in the last issue of The Wildlife Society Bulletin found that using coyote urine to mark off an area to keep other coyotes away, not only didn’t repel them, but only served to have coyotes linger in the area.
Read the article in Wildlife Society Bulletin. (Subscription of fee required, but the abstract pretty much tells you all you need to know.)
A Ph.D. student of that paper’s lead author did a similar study a few years ago, with captive coyotes, and got a similar finding. Read her doctoral thesis, with references to the predator/prey studies and other background info on the general concept — here.
Coyote photo by Steve Thompson, courtesy US Fish and Wildlife Service