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Cyber incidents, security measures and financial returns: Empirical evidence from Dutch firms

Author

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  • Milena Dinkova
  • Ramy El-Dardiry
  • Bastiaan Overvest

    (CPB Netherlands Bureau for Economic Policy Analysis)

Abstract

This CPB discussion paper investigates the cybersecurity of Dutch small and medium-sized enterprises, the security measures they take and the relationship thereof with financial results. Often, small and medium-sized enterprises are identified as a particularly vulnerable group for cyber incidents. However, there is not much academic research focusing on the cyber security costs for those firms. In this paper, we employ representative survey data on ICT use and administrative tax record data on Dutch firms to understand how cybersecurity investments relate to the probability of cyber incidents and firm profitability. This dataset allows us to control for firm size, industry, and IT organization.

Suggested Citation

  • Milena Dinkova & Ramy El-Dardiry & Bastiaan Overvest, 2020. "Cyber incidents, security measures and financial returns: Empirical evidence from Dutch firms," CPB Discussion Paper 411, CPB Netherlands Bureau for Economic Policy Analysis.
    • Handle: RePEc:cpb:discus:411
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    References listed on IDEAS

    as
    1. Kamiya, Shinichi & Kang, Jun-Koo & Kim, Jungmin & Milidonis, Andreas & Stulz, René M., 2021. "Risk management, firm reputation, and the impact of successful cyberattacks on target firms," Journal of Financial Economics, Elsevier, vol. 139(3), pages 719-749.
    2. Tyler Moore & Richard Clayton & Ross Anderson, 2009. "The Economics of Online Crime," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 3-20, Summer.
    3. Eli Amir & Shai Levi & Tsafrir Livne, 2018. "Do firms underreport information on cyber-attacks? Evidence from capital markets," Review of Accounting Studies, Springer, vol. 23(3), pages 1177-1206, September.
    4. Bastiaan Overvest & Bas Straathof, 2015. "What drives cybercrime? Empirical evidence from DDoS attacks," CPB Discussion Paper 306.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Bastiaan Overvest & Bas Straathof, 2015. "What drives cybercrime? Empirical evidence from DDoS attacks," CPB Discussion Paper 306, CPB Netherlands Bureau for Economic Policy Analysis.
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    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management

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