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Cybersecurity governance and corporate innovation: evidence from China

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  • Xu, Jing

Abstract

Cybersecurity governance is a momentous pillar for firms to cope with digital risks in the digital era. This paper combines machine learning and text analysis to measure firm cybersecurity governance level and empirically examines its impact on corporate innovation. The empirical results suggest that cybersecurity governance significantly promotes corporate innovation through channels such as improving corporate reputation, reducing precautionary saving, and increasing risk-taking preference. Moreover, the promotion effect is more significant in small, non-state-owned firms, high-tech intensive industries, and firms located in regions with high digital economy development level. This study provides empirical evidence and decision-making references for firms and authorities to proactively carry out cybersecurity governance.

Suggested Citation

  • Xu, Jing, 2025. "Cybersecurity governance and corporate innovation: evidence from China," Finance Research Letters, Elsevier, vol. 82(C).
    • Handle: RePEc:eee:finlet:v:82:y:2025:i:c:s1544612325008785
    DOI: 10.1016/j.frl.2025.107619
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