Cybersecurity and Brand Value

We examine whether and how cybersecurity breaches impact firms’ brand names and customer trust. A difference-in-differences analysis indicates that firms suffering cybersecurity breaches are associated with more canceled trademarks, fewer trademark registrations, and fewer trademark citations. We also show that cybersecurity breaches are associated with more negative news sentiments and poorer operating performance. Further analyses suggest that brand value is hurt more by cybersecurity breaches when firms have more internet advertising activities, when firms are subject to managerial inertia, or when firms have poorer internal controls.