Cyberrisk and AI Firms

Kumar Rishabh, Roxana Mihet and Julian Jang-Jaccard
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Kumar Rishabh: University of Basel
Roxana Mihet: Swiss Finance Institute - HEC Lausanne
Julian Jang-Jaccard: Swiss Federal Office for Defence Procurement

No 25-39, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: Does AI make firms vulnerable or resilient to cyber risk? To answer this, we develop a novel measure identifying AI-intensive U.S. public firms using publicly available patents and business-description data. While cyber threats typically suppress innovation, AI-intensive firms neutralize this effect. This protective effect strengthens with greater AI experience. Moreover, firms combining AI innovation and implementation exhibit a stronger buffer protecting their innovation and financial outcomes under cyber stress, whereas firms merely implementing AI without internal innovation gain no such resilience. Our results emphasize internal AI innovation as fundamental in enabling firms to effectively withstand cyber threats.

Keywords: Cyberrisk; artificial intelligence; innovation; resilience; economics of AI; economics of cybercrime (search for similar items in EconPapers)
JEL-codes: D8 G3 L1 L2 M1 O3 O4 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2025-04
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2539

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