How a Data Breach Affects the Bottom Line

Cyberattacks are an increasingly common threat to business, with risk officers listing cybersecurity as their greatest concern and more than 2,200 confirmed data breaches in 2017, according to a new report from Verizon. The headlines about hacking often focus on potential harm to consumers whose data is stolen, but there hadn’t been a systematic analysis of the effects of cyberattacks on a company’s sales, market valuation and other metrics. A recent study does just that, though imperfectly.

Using events reported as cyber-breaches in the nonprofit Privacy Rights Clearinghouse, a team of economists from Singapore, Cyprus, Hong Kong and the U.S. examined which firms are at highest risk of attack and what the consequences are. They manually matched the company names in the clearinghouse to other information and wound up with a sample of almost 150 affected firms.