The Effect of Malicious Cyber Activity on the U.S. Corporate Sector

58 Pages Posted: 7 Apr 2023 Last revised: 8 Jun 2023

See all articles by Anna Scherbina

Anna Scherbina

Brandeis University

Bernd Schlusche

Board of Governors of the Federal Reserve System

Date Written: March 25, 2023

Abstract

We compile a comprehensive dataset of adverse cyber events experienced by U.S. firms. We then categorize cyber incidents by their detrimental impacts on firms' assets and operations and show that firms suffer significant value losses across multiple cyber categories. These losses also spill over to economically linked firms, thereby amplifying the negative effect of malicious cyber activity on the economy. We additionally assemble a lexicon to identify from public sources firms that possess trade secrets, work on emerging technology or critical infrastructure projects, or have government and defense contracts, and show that such firms face a higher risk of a cyber incident

Keywords: Cyberattacks, Malicious Cyber Activity, Cyber Threat Actors, Attack Vectors, Intellectual Property Theft, Trade Secrets, Critical Infrastructures, Emerging Technologies, Defense Contracts, Government Contracts, Spillover Effects, Economically Linked Firms, Corporate Transparency

JEL Classification: G10, G12, G14, G17

Suggested Citation

Scherbina, Anna D. and Schlusche, Bernd, The Effect of Malicious Cyber Activity on the U.S. Corporate Sector (March 25, 2023). Available at SSRN: https://ssrn.com/abstract=4400066 or http://dx.doi.org/10.2139/ssrn.4400066

Anna D. Scherbina (Contact Author)

Brandeis University ( email )

415 South Street
Waltham, MA 02453
United States

HOME PAGE: http://sites.google.com/a/brandeis.edu/anna-scherbina/

Bernd Schlusche

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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