Cybersecurity governance and corporate market value: Perspectives from investor trust and supply chain trust

Abstract

In the digital era, data security and governance have become essential pillars for corporate ESG (Environmental, Social, and Governance) development and for maintaining social stability. This paper employs machine learning-based textual analysis to map cybersecurity governance in Chinese firms and government digital economy regulatory indicators. From the perspectives of investor trust and supply chain trust, and incorporating legitimacy theory, we empirically examine the relationship between cybersecurity governance, government digital economy regulation, and corporate market value. The study finds that cybersecurity governance significantly enhances corporate market value, primarily through a reputation-building mechanism that strengthens both investor trust and supply chain trust. Heterogeneity analysis shows that the market reputation effect of cybersecurity governance is more pronounced in firms with non-short-sighted management, stronger protection of trade secrets, higher media attention on ESG, and in high-tech industries. Furthermore, government digital economy regulation can further amplify the positive impact of corporate cybersecurity governance on market value, with the most significant effects observed in areas such as rights protection, data sharing, and security safeguards. The findings of this paper provide important practical insights for firms in emerging economies to address cybersecurity risks, stabilize supply chains, and enhance investor cooperation.