Affiliation:
1. Florida Atlantic University
Abstract
ABSTRACT
Many firms cite cyber risk as a primary risk factor due to the increase in cybersecurity breach (CSB) incidents. Existing research focuses on the negative, short-term impacts from CSBs, but the longer-term impact is still unknown. Our study investigates firms' levels of innovation following a CSB as an important determinant of firm growth and profitability. Examining reported breaches from 2005–2014, we find a 10 percent decline in research and development spending in the year following a CSB. Further investigation indicates that firms for which R&D is not the primary business model drive the results. We also provide evidence of a decrease in patents two years after a breach, an increase in cash holdings in the year after the breach, and a decrease in investment efficiency four years following the breach. Our aggregate results suggest that CSBs are associated with future strategic decisions involving firm-level innovation and investment decisions.
Data Availability: Data are available from the public sources cited in the text.
Publisher
American Accounting Association
Subject
Management of Technology and Innovation,Information Systems and Management,Human-Computer Interaction,Accounting,Information Systems,Software,Management Information Systems
Reference78 articles.
1. Accenture Finance and Risk Services.
2016.
The convergence of operational risk and cyber security.
Available at: https://www.accenture.com/t20170803T055319Z__w__/us-en/_acnmedia/PDF-7/Accenture-Cyber-Risk-Convergence-Of-Operational-Risk-And-Cyber-Security.pdf
2. Acquisti
A.,
Friedman
A.,
and
TelangR.
2006.
Is there a cost to privacy breaches? An event study.
Available at: https://www.researchgate.net/publication/220268931_Is_There_a_Cost_to_Privacy_Breaches_An_Event_Study
3. Acs,
Z. J.,
and
AudretschD. B.
1988.
Innovation in large and small firms: An empirical analysis.
The American Economic Review78
(4):
678–690.
4. Akerlof,
G.
1970.
The market for lemons: Qualitative uncertainty and the market mechanism.
The Quarterly Journal of Economics84
(3):
488–500.
https://doi.org/10.2307/1879431
5. Almeida,
H.,
Campello
M.,
and
WeisbachM. S.
2004.
The cash flow sensitivity of cash.
The Journal of Finance59
(4):
1777–1804.
https://doi.org/10.1111/j.1540-6261.2004.00679.x
Cited by
20 articles.
订阅此论文施引文献
订阅此论文施引文献，注册后可以免费订阅5篇论文的施引文献，订阅后可以查看论文全部施引文献