Cybersecurity incidents and data breaches are increasingly common and pose significant financial risks for firms. This study examines how consumers respond to major data breach announcements and evaluates their economic consequences for affected companies. Using a difference-in-differences research design, we analyze a large-scale data breach in the hospitality industry that exposed over 380 million customer records. The results show a short-term decline in the firm's revenue following the breach disclosure, lasting approximately two months before recovering. These findings suggest that while data breaches initially affect consumer behavior, long-term financial consequences may be more limited than commonly assumed, potentially due to consumers' limited attention to privacy concerns.
About Dominik Molitor
Dominik Molitor is an Associate Professor of Information Technology and Operations at the Gabelli School of Business at Fordham University. His research focuses on digital commerce and the policy implications of digital technologies, using causal inference and data science methods to study how firms and consumers interact in digital markets. His work has been published in leading academic journals including Information Systems Research, Marketing Science, Journal of Management Information Systems, Decision Support Systems, and PLOS ONE. His research examines issues such as cybersecurity, data breaches, consumer behavior, and the broader economic impacts of digital technologies on firms and markets.