M&amp;amp;A and Cybersecurity Risk: Empirical Evidence

Lattanzio, Gabriele; Taillard, Jérôme

doi:10.2139/ssrn.4170093

Cited by 3 publications

(4 citation statements)

References 18 publications

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“…These studies approach from the opposite direction to ours, and the measure for data cybersecurity yields from the regulatory side that does not essentially indicate the risk of cybersecurity breaches at the firm level. Our study also differs from Lattanzio and Taillard (2022), which delve into the relationship in the other direction and suggest a higher likelihood of M&A engagement among low‐cybersecurity‐risk firms. Our analysis, coupled with Lattanzio and Taillard's (2022) findings, demonstrates that the relationship between the two factors could be bidirectional after employing different econometric approaches to address causality.…”

Section: Introductioncontrasting

confidence: 84%

“…Our study also differs from Lattanzio and Taillard (2022), which delve into the relationship in the other direction and suggest a higher likelihood of M&A engagement among low‐cybersecurity‐risk firms. Our analysis, coupled with Lattanzio and Taillard's (2022) findings, demonstrates that the relationship between the two factors could be bidirectional after employing different econometric approaches to address causality. Hence, this study contributes to the embryonic literature on corporate cybersecurity risk as a cautionary note for researchers when addressing the relationship between cybersecurity risk and corporate M&A.…”

Section: Introductioncontrasting

confidence: 84%

“…Because Lattanzio and Taillard (2022) previously showed that firms with low cybersecurity risk are more inclined to come up with M&A decisions, reverse causality can be a possible issue in our model. To address this endogeneity, we employ the two‐stage least square/instrumental variable (2SLS/IV) regression to re‐estimate the baseline model (1).…”

Section: Methodsmentioning

confidence: 99%

Section: Empirical Model and Variable Measurementsmentioning

confidence: 99%

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Merger and acquisition, firm‐level cybersecurity risk, and research and development intensity

Vu,

Hoang,

Hoang

2024

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This paper investigates the relationship between firm‐level cybersecurity risk and merger and acquisition (M&A) activities of firms in the United States from 2007 to 2018. Using a novel measure of firm‐level cybersecurity risk and the multivariate regression analysis, we find empirical evidence of a positive association between M&A and cybersecurity risk. Interestingly, cybersecurity risk only increases with intangible assets acquisitions, but not with tangible assets acquisitions. Further empirical analysis shows that the impact of M&A on cybersecurity risk is moderated by technological intensity, with firms that have higher levels of research and development (R&D) intensity facing less pronounced cybersecurity risk. Our findings are robust to different variable measurements and endogeneity diagnoses. Our results deliver important implications for practitioners and policymakers and make a valuable contribution to the literature by providing a more comprehensive understanding of the relationship between M&A and cybersecurity risk and by highlighting the role of corporate innovation in mitigating this risk.

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Section: Introductioncontrasting

confidence: 84%

Section: Introductioncontrasting

confidence: 84%

Section: Methodsmentioning

confidence: 99%

Section: Empirical Model and Variable Measurementsmentioning

confidence: 99%

See 2 more Smart Citations

Merger and acquisition, firm‐level cybersecurity risk, and research and development intensity

Vu,

Hoang,

Hoang

2024

Manage Decis Econ

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Securing Business Intelligence during Mergers and Acquisition: Critical Cybersecurity Imperatives

Nandi,

Fatma,

Pathak

et al. 2023

2023 4th International Conference on Data Analytics for Business and Industry (ICDABI)

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Corporate cybersecurity risk and data breaches: A systematic review of empirical research

Liu,

Babar

2024

Australian Journal of Management

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Cybersecurity constitutes a major concern for corporations. Given the disciplinary barriers that fragment existing research on cybersecurity, we conduct a systemic review of 203 empirical studies on the determinants and consequences of corporate cybersecurity risk across 12 disciplines. By consolidating multidisciplinary research, we develop a novel framework mapping the inter-relationships between the drivers of cybersecurity risk, impacts of cyberattacks, and potential feedback mechanisms enabling firms to learn from breaches to improve cybersecurity outcomes. We provide a taxonomy of both cybersecurity risk factors and impacts of cybersecurity breaches. Our study provides valuable insights to executives, investors, and regulators by enhancing risk awareness and enabling industry practitioners and policymakers to harness the power of academic research to strengthen corporate cybersecurity resilience. JEL Classification: G30, G32, D81, D62, J24.

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M&A and Cybersecurity Risk: Empirical Evidence

Cited by 3 publications

References 18 publications

Merger and acquisition, firm‐level cybersecurity risk, and research and development intensity

Merger and acquisition, firm‐level cybersecurity risk, and research and development intensity

Securing Business Intelligence during Mergers and Acquisition: Critical Cybersecurity Imperatives

Corporate cybersecurity risk and data breaches: A systematic review of empirical research

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