Abstract
We analyze whether cybersecurity, as an associated cost of digitization, slows down the digital economy. Our identification strategy exploits the staggered adoption of security breach notification laws (SBNLs) in 47 US states, which require companies to publicly disclose data breaches. We study how SBNLs affect the employment of IT service providers, the main suppliers of the digital economy. We find that the enactment of SBNLs leads to a reduction in employment by mature and large IT service providers, but not for younger and smaller firms. This study provides fresh evidence related to the unintended and broader impacts of cybersecurity legislation.

Biography
Dr. Tianjian Zhang is an assistant professor of Information Systems at the College of Business, City University of Hong Kong. His research areas include the economics of cybersecurity, financial technologies, and technology diffusion.