Disclosure of Cybersecurity Investments and the Cost of Capital

Executives often hesitate to disclose their company’s cybersecurity investments, fearing lawsuits or negative reactions from investors. Our research shows that transparency in this area actually pays off. Analyzing SEC filings from nearly 2,000 public firms, we find that companies that disclose cybersecurity investments enjoy a lower cost of capital—cheaper access to debt and equity financing. These benefits are strongest when disclosures are specific rather than boilerplate, when the firm is followed by more analysts and more institutional investors, and when disclosed investments in cybersecurity are substantial. The takeaway is clear: Meaningful disclosure builds trust with investors, who reward transparency by lowering financing costs. For leaders and regulators alike, this finding highlights that openness about cybersecurity readiness is not just good governance—It is smart business in a capital market that increasingly values risk management and resilience.

• 저널Information Systems Research
• 토픽Auditing, Earnings Management, Governance · Accounting
• DOI10.1287/isre.2023.0260
• 저자Taha Havakhor, Mohammad Saifur Rahman, Tianjian Zhang