Lecture: The Socially Irresponsible Side of Data Breach: Can Corporate Social Responsibility Shield the Breached Firm?
Title: The Crowding-out Effects of Political Ties on Market Capabilities: Evidence from ChinaTime: 9:00-11:00, June 17, 2021
Room: Tencent meeting
Speaker: Shuili Du
Abstract：Data breaches are increasingly common, yet prior research only yields inconclusive results on how the market reacts to breaches. This study employs causal attribution theory and its four dimensions （severity, locus of causality, controllability, and stability） as an overarching framework to identify and categorize the contextual characteristics of a data breach that underlie investors’ attributions, and we investigate how corporate social responsibility （CSR） influences investor reaction to the breached firm. Using panel data, we find that the market reacts more negatively if a breach incident is more severe or occurs at a firm that consistently demonstrates irresponsible behaviors. In contrast, the market reaction is less negative when a breach occurs at a firm that has high CSR performance. CSR also attenuates the negative effects of breach characteristics （severity and stability） on the market value of the breached firm. This research highlights the importance of examining contextual characteristics of a breach and the role of CSR as an insurance policy to mitigate the negative impacts of breaches.