IDEAS home Printed from https://ideas.repec.org/a/kap/sbusec/v64y2025i3d10.1007_s11187-024-00946-8.html
   My bibliography  Save this article

Cyberattack, cyber risk mitigation capabilities, and firm productivity in Kenya

Author

Listed:
  • Godsway Korku Tetteh

    (University of Strathclyde
    UNU-MERIT, Maastricht University)

  • Chuks Otioma

    (UNU-MERIT, Maastricht University
    Adam Smith Business School, University of Glasgow)

Abstract

Most scholarly work has focused on the positive effects of digitalisation in Sub-Saharan Africa without accounting for the associated risks and mitigation measures at the firm level. Using the 2016 Enterprise ICT Survey of Kenya which provides a rich source of information on the use of ICT among firms, we examine the effect of cybersecurity breach on labour productivity and show how this effect is moderated by cyber risk mitigation capabilities at the firm level. We find that cybersecurity breach reduces labour productivity at the firm level. We also find that upskilling mitigates the negative effect of cybersecurity breach on labour productivity especially for Small and Medium-sized Enterprises. The results further suggest that while Information Technology Policy and Information Technology Security capabilities can enable firms to improve labour productivity, these measures are not sufficient to offset the adverse effect of cybersecurity breach on labour productivity. Together the results imply that upskilling is an effective cyber risk mitigation measure against cybersecurity breaches at the firm level and therefore should be an integral part of the overarching IT governance strategy of firms.

Suggested Citation

  • Godsway Korku Tetteh & Chuks Otioma, 2025. "Cyberattack, cyber risk mitigation capabilities, and firm productivity in Kenya," Small Business Economics, Springer, vol. 64(3), pages 1493-1514, March.
    • Handle: RePEc:kap:sbusec:v:64:y:2025:i:3:d:10.1007_s11187-024-00946-8
    DOI: 10.1007/s11187-024-00946-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11187-024-00946-8
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11187-024-00946-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Asif Islam & Silvia Muzi & Jorge Luis Rodriguez Meza, 2018. "Does mobile money use increase firms’ investment? Evidence from Enterprise Surveys in Kenya, Uganda, and Tanzania," Small Business Economics, Springer, vol. 51(3), pages 687-708, October.
    2. Yılmaz Kılıçaslan & Robin C. Sickles & Aliye Atay Kayış & Yeşim Üçdoğruk Gürel, 2017. "Impact of ICT on the productivity of the firm: evidence from Turkish manufacturing," Journal of Productivity Analysis, Springer, vol. 47(3), pages 277-289, June.
    3. Arthur Grimes & Cleo Ren & Philip Stevens, 2012. "The need for speed: impacts of internet connectivity on firm productivity," Journal of Productivity Analysis, Springer, vol. 37(2), pages 187-201, April.
    4. Silvia Muzi & Filip Jolevski & Kohei Ueda & Domenico Viganola, 2023. "Productivity and firm exit during the COVID-19 crisis: cross-country evidence," Small Business Economics, Springer, vol. 60(4), pages 1719-1760, April.
    5. Giulio Cainelli & Rinaldo Evangelista & Maria Savona, 2006. "Innovation and economic performance in services: a firm-level analysis," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 30(3), pages 435-458, May.
    6. Nicholas Bloom & Mirko Draca & John Van Reenen, 2016. "Trade Induced Technical Change? The Impact of Chinese Imports on Innovation, IT and Productivity," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 83(1), pages 87-117.
    7. Zoltan J. Acs & Abraham K. Song & László Szerb & David B. Audretsch & Éva Komlósi, 2021. "The evolution of the global digital platform economy: 1971–2021," Small Business Economics, Springer, vol. 57(4), pages 1629-1659, December.
    8. Phillips, Rick & Tanner, Brandon, 2019. "Breaking down silos between business continuity and cyber security," Journal of Business Continuity & Emergency Planning, Henry Stewart Publications, vol. 12(3), pages 224-232, March.
    9. Nambisan, Satish & Wright, Mike & Feldman, Maryann, 2019. "The digital transformation of innovation and entrepreneurship: Progress, challenges and key themes," Research Policy, Elsevier, vol. 48(8), pages 1-1.
    10. Daron Acemoglu & Pascual Restrepo, 2020. "Robots and Jobs: Evidence from US Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 128(6), pages 2188-2244.
    11. Wang, Jimin & Ho, Choy Yeing (Chloe) & Shan, Yuan George, 2024. "Does cybersecurity risk stifle corporate innovation activities?," International Review of Financial Analysis, Elsevier, vol. 91(C).
    12. Moore, Tyler, 2010. "The economics of cybersecurity: Principles and policy options," International Journal of Critical Infrastructure Protection, Elsevier, vol. 3(3), pages 103-117.
    13. Kamiya, Shinichi & Kang, Jun-Koo & Kim, Jungmin & Milidonis, Andreas & Stulz, René M., 2021. "Risk management, firm reputation, and the impact of successful cyberattacks on target firms," Journal of Financial Economics, Elsevier, vol. 139(3), pages 719-749.
    14. Rethabile Masenyetse & Malefu Manamathela, 2023. "Firm growth, exporting and information communication technology (ICT) in Southern Africa," Journal of Innovation and Entrepreneurship, Springer, vol. 12(1), pages 1-12, December.
    15. Castiglione, Concetta & Infante, Davide, 2014. "ICTs and time-span in technical efficiency gains. A stochastic frontier approach over a panel of Italian manufacturing firms," Economic Modelling, Elsevier, vol. 41(C), pages 55-65.
    16. John D'Arcy & Anat Hovav & Dennis Galletta, 2009. "User Awareness of Security Countermeasures and Its Impact on Information Systems Misuse: A Deterrence Approach," Information Systems Research, INFORMS, vol. 20(1), pages 79-98, March.
    17. William Greene, 1998. "Gender Economics Courses in Liberal Arts Colleges: Comment," Working Papers 98-06, New York University, Leonard N. Stern School of Business, Department of Economics.
    18. Romi Kher & Siri Terjesen & Chen Liu, 2021. "Blockchain, Bitcoin, and ICOs: a review and research agenda," Small Business Economics, Springer, vol. 56(4), pages 1699-1720, April.
    19. Zhen, Jie & Xie, Zongxiao & Dong, Kunxiang, 2021. "Impact of IT governance mechanisms on organizational agility and the role of top management support and IT ambidexterity," International Journal of Accounting Information Systems, Elsevier, vol. 40(C).
    20. Asif M. Islam & Silvia Muzi, 2022. "Does mobile money enable women-owned businesses to invest? Firm-level evidence from Sub-Saharan Africa," Small Business Economics, Springer, vol. 59(3), pages 1245-1271, October.
    21. Ndubuisi, Gideon & Otioma, Chuks & Tetteh, Godsway Korku, 2021. "Digital infrastructure and employment in services: Evidence from Sub-Saharan African countries," Telecommunications Policy, Elsevier, vol. 45(8).
    22. Victor Motta, 2020. "Lack of access to external finance and SME labor productivity: does project quality matter?," Small Business Economics, Springer, vol. 54(1), pages 119-134, January.
    23. William H. Greene, 1998. "Gender Economics Courses in Liberal Arts Colleges: Further Results," The Journal of Economic Education, Taylor & Francis Journals, vol. 29(4), pages 291-300, January.
    24. David Roodman, 2011. "Fitting fully observed recursive mixed-process models with cmp," Stata Journal, StataCorp LLC, vol. 11(2), pages 159-206, June.
    25. Lee, In, 2021. "Cybersecurity: Risk management framework and investment cost analysis," Business Horizons, Elsevier, vol. 64(5), pages 659-671.
    26. Erik Brynjolfsson & Lorin M. Hitt, 2000. "Beyond Computation: Information Technology, Organizational Transformation and Business Performance," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 23-48, Fall.
    27. Merrill Warkentin & Robert Willison, 2009. "Behavioral and policy issues in information systems security: the insider threat," European Journal of Information Systems, Taylor & Francis Journals, vol. 18(2), pages 101-105, April.
    28. Vu, Khuong & Hanafizadeh, Payam & Bohlin, Erik, 2020. "ICT as a driver of economic growth: A survey of the literature and directions for future research," Telecommunications Policy, Elsevier, vol. 44(2).
    29. Li, Ling & He, Wu & Xu, Li & Ash, Ivan & Anwar, Mohd & Yuan, Xiaohong, 2019. "Investigating the impact of cybersecurity policy awareness on employees’ cybersecurity behavior," International Journal of Information Management, Elsevier, vol. 45(C), pages 13-24.
    30. Lunardi, Guilherme Lerch & Becker, João Luiz & Maçada, Antonio Carlos Gastaud & Dolci, Pietro Cunha, 2014. "The impact of adopting IT governance on financial performance: An empirical analysis among Brazilian firms," International Journal of Accounting Information Systems, Elsevier, vol. 15(1), pages 66-81.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Agbodoh-Falschau, Kouassi Raymond & Ravaonorohanta, Bako Harinivo, 2023. "Investigating the influence of governance determinants on reporting cybersecurity incidents to police: Evidence from Canadian organizations’ perspectives," Technology in Society, Elsevier, vol. 74(C).
    2. Ajoy Ketan Sarangi & Rudra Prakash Pradhan, 2020. "ICT infrastructure and economic growth: a critical assessment and some policy implications," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 47(4), pages 363-383, December.
    3. Stamopoulos, Dimitrios & Dimas, Petros & Tsakanikas, Aggelos, 2022. "Exploring the structural effects of the ICT sector in the Greek economy: A quantitative approach based on input-output and network analysis," Telecommunications Policy, Elsevier, vol. 46(7).
    4. Juan Acosta-Ballesteros & María del Pilar Osorno-del Rosal & Olga María Rodríguez-Rodríguez, 2018. "Overeducation of Young Workers in Spain: How Much Does the First Job Matter? Social Indicators Research," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 138(1), pages 109-139, July.
    5. DeStefano, Timothy & Timmis, Jonathan, 2024. "Robots and export quality," Journal of Development Economics, Elsevier, vol. 168(C).
    6. Tetteh, Godsway Korku & Goedhuys, Micheline & Konte, Maty & Mohnen, Pierre, 2021. "Mobile money adoption and entrepreneurs’ access to trade credit in the informal sector," MERIT Working Papers 2021-043, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. Coban, Mustafa, 2017. "I'm fine with Immigrants, but ...: Attitudes, ethnic diversity, and redistribution preference," Discussion Paper Series 137, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    8. Giovanni Bruno & Orietta Dessy, 2014. "Average partial effects in multivariate probit models with latent heterogeneity: Monte Carlo experiments and an application to immigrants' ethnic identity and economic performance," Italian Stata Users' Group Meetings 2014 10, Stata Users Group.
    9. Schneider, Florian, 2024. "Do robots boost productivity? A quantitative meta-study," MPRA Paper 123392, University Library of Munich, Germany.
    10. DeStefano, Timothy & Kneller, Richard & Timmis, Jonathan, 2018. "Broadband infrastructure, ICT use and firm performance: Evidence for UK firms," Journal of Economic Behavior & Organization, Elsevier, vol. 155(C), pages 110-139.
    11. Coban, Mustafa, 2020. "Redistribution Preferences, Attitudes towards Immigrants, and Ethnic Diversity," IAB-Discussion Paper 202023, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    12. Uwe Jirjahn & Jens Mohrenweiser & Stephen C Smith, 2022. "Works councils and workplace health promotion in Germany," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(3), pages 1059-1094, August.
    13. Joan Costa-Font & Mireia Jofre-Bonet, 2013. "Anorexia, Body Image and Peer Effects: Evidence from a Sample of European Women," Economica, London School of Economics and Political Science, vol. 80(317), pages 44-64, January.
    14. Pérez, Carlos & Martín-Román, Ángel & Moral, Alfonso, 2020. "Two decades of the complementary leisure effect in Spain," The Journal of the Economics of Ageing, Elsevier, vol. 15(C).
    15. Huang, Qianqian & Jiang, Feng & Lie, Erik & Yang, Ke, 2014. "The role of investment banker directors in M&A," Journal of Financial Economics, Elsevier, vol. 112(2), pages 269-286.
    16. Sheida Teimouri & Joachim Zietz, 2025. "Housing prices and import competition," Empirical Economics, Springer, vol. 68(1), pages 253-280, January.
    17. Njangang, Henri & Beleck, Alim & Tadadjeu, Sosson & Kamguia, Brice, 2022. "Do ICTs drive wealth inequality? Evidence from a dynamic panel analysis," Telecommunications Policy, Elsevier, vol. 46(2).
    18. Keller, Wolfgang & Utar, Hale, 2023. "International trade and job polarization: Evidence at the worker level," Journal of International Economics, Elsevier, vol. 145(C).
    19. Ridhima Gupta, 2011. "Agro-environmental revolution in Punjab: Case of the happy seeder technology," Discussion Papers 11-11, Indian Statistical Institute, Delhi.
    20. Evangelista, Rinaldo & Vezzani, Antonio, 2010. "The economic impact of technological and organizational innovations. A firm-level analysis," Research Policy, Elsevier, vol. 39(10), pages 1253-1263, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:sbusec:v:64:y:2025:i:3:d:10.1007_s11187-024-00946-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.