Intellectual property protection and corporate data-breach risks

Abstract

Using a longitudinal dataset of Chinese listed firms from 2007 to 2022, this study investigates the impact of intellectual property protection (IPP) on corporate data-breach risks and explores the underlying mechanisms. We find that IPP negatively affects corporate data-breach risks, and this conclusion remains robust after a series of sensitivity tests. Regarding the mechanisms, IPP mitigates data-breach risks by enhancing data protection awareness and strengthening data management processes. The heterogeneity analysis reveals that the negative effect of IPP on corporate data-breach risks is more pronounced in high-tech firms, state-owned firms, and firms with political ties. Our findings contribute to a better understanding of the antecedents of corporate data breach and broaden the knowledge about the implications of IPP. Furthermore, these findings offer valuable insights into developing proactive risk mitigation and data security strategies for firms.