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The hidden cost of silence: How delayed cyberattack disclosure erodes firm profitability

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  • Xinhui Huang
  • Balaji Janamanchi
  • Lukai Yang

Abstract

Cybersecurity disclosure has garnered significant attention in the past decade. In this study, we observe that the disclosure delays are inversely correlated with firm profitability and we attribute this to information asymmetry. In addition, we find that such a negative impact is mitigated by the presence of a Chief Information Officer. Furthermore, we show that delayed disclosure has negative consequences on CEO compensation. Finally, our results are robust to alternative measures of disclosure delays and profitability. This paper highlights the adverse effect of delayed cyberattack disclosures and has broad implications for cybersecurity practices, regulatory frameworks, and risk management strategies.

Suggested Citation

  • Xinhui Huang & Balaji Janamanchi & Lukai Yang, 2025. "The hidden cost of silence: How delayed cyberattack disclosure erodes firm profitability," Applied Economics Letters, Taylor & Francis Journals, vol. 32(11), pages 1639-1643, June.
    • Handle: RePEc:taf:apeclt:v:32:y:2025:i:11:p:1639-1643
    DOI: 10.1080/13504851.2024.2310052
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