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Cybersecurity policy and corporate R&D investment

Author

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  • Nong, Huihui
  • Lin, Yinghao
  • Zhang, Quankun

Abstract

This study examines the impact of China's Cybersecurity Law on corporate research and development (R&D) investment. Constructing a difference-in-differences model and using data from A-share listed companies on the Shanghai and Shenzhen stock exchanges between 2007 and 2022, this study demonstrates that Cybersecurity Law implementation significantly promotes corporate R&D investment. Robustness tests included parallel trend tests, propensity score matching, and sample period adjustment, and their results were validated. Heterogeneity analysis reveals that the positive impact is more significant for firms in areas with stronger market development, those with fewer financing constraints, and state-owned enterprises. This study enriches the theoretical understanding of the relationship between cybersecurity policy and corporate R&D and provides valuable insights for policymakers.

Suggested Citation

  • Nong, Huihui & Lin, Yinghao & Zhang, Quankun, 2025. "Cybersecurity policy and corporate R&D investment," Finance Research Letters, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:finlet:v:75:y:2025:i:c:s154461232500203x
    DOI: 10.1016/j.frl.2025.106939
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    More about this item

    Keywords

    Cybersecurity law; R&D Investment; Cybersecurity risk; Innovation;
    All these keywords.

    JEL classification:

    • K24 - Law and Economics - - Regulation and Business Law - - - Cyber Law
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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