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Customer data privacy & security as a firm strategy: financial implications, risks, and the role of product-market competition

Author

Listed:
  • Avramidis, Panagiotis
  • Panagopoulos, Nikolaos G.
  • Serfes, Konstantinos
  • Vlachos, Pavlos A.

Abstract

To what extent do firms pursue a customer data privacy & security strategy (CDPSS) as a competitive differentiator? What are the drivers and outcomes of this strategy? Drawing on the structure-conduct-performance framework and using a shift-share (Bartik-style) instrument, we find that firms respond to intensified product-market competition (PMC) by leveraging CDPSS, with this effect moderated by advertising intensity. We also find that competing on data privacy & security creates complex trade-offs: although employing CDPSS can reduce revenues or Total Q, it can, however, diminish litigation risk or the need for liquidity. Hence, CDPSS can be both an asset and a liability. Finally, we find mixed evidence for the mediating role of CDPSS in the PMC-performance relationship: although CDPSS mediates the effect of PMC on both revenues and litigation risk, the mediating role of CDPSS in the relationship of PMC with either Total Q or liquidity is not significant.

Suggested Citation

  • Avramidis, Panagiotis & Panagopoulos, Nikolaos G. & Serfes, Konstantinos & Vlachos, Pavlos A., 2026. "Customer data privacy & security as a firm strategy: financial implications, risks, and the role of product-market competition," Journal of Business Research, Elsevier, vol. 208(C).
    • Handle: RePEc:eee:jbrese:v:208:y:2026:i:c:s0148296326001049
    DOI: 10.1016/j.jbusres.2026.116070
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