{"title":"Privacy regulation and firm performance: Estimating the GDPR effect globally","authors":"Carl Benedikt Frey, Giorgio Presidente","doi":"10.1111/ecin.13213","DOIUrl":null,"url":null,"abstract":"<p>This paper examines how privacy regulation shaped firm performance. Controlling for firm and country-industry-year unobserved characteristics, we compare the outcomes of firms at different levels of exposure to EU markets, before and after the enforcement of the General Data Protection Regulation (GDPR) in 2018. We find that the GDPR had the unintended consequence of harming the profitability of companies targeting European consumers through the cost channel. Technology firms experienced a 2.1% decline in profits, but not in sales. The GDPR increased extra expenses, added to firms wage bills, and accelerated patenting in GDPR-related technology fields. The main burdens have been borne by smaller companies.</p>","PeriodicalId":51380,"journal":{"name":"Economic Inquiry","volume":"62 3","pages":"1074-1089"},"PeriodicalIF":1.7000,"publicationDate":"2024-03-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/ecin.13213","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economic Inquiry","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/ecin.13213","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This paper examines how privacy regulation shaped firm performance. Controlling for firm and country-industry-year unobserved characteristics, we compare the outcomes of firms at different levels of exposure to EU markets, before and after the enforcement of the General Data Protection Regulation (GDPR) in 2018. We find that the GDPR had the unintended consequence of harming the profitability of companies targeting European consumers through the cost channel. Technology firms experienced a 2.1% decline in profits, but not in sales. The GDPR increased extra expenses, added to firms wage bills, and accelerated patenting in GDPR-related technology fields. The main burdens have been borne by smaller companies.
期刊介绍：
Published since 1962, (formerly Western Economic Journal), EI is widely regarded as one of the top scholarly journals in its field. Besides containing research on all economics topic areas, a principal objective is to make each article understandable to economists who are not necessarily specialists in the article topic area. Nine Nobel laureates are among EI long list of prestigious authors.
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