Pirates without Borders: The Propagation of Cyberattacks through Firms’ Supply Chains
Matteo Crosignani (),
Marco Macchiavelli and
André Silva ()
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Marco Macchiavelli: https://www.federalreserve.gov/econres/marco-macchiavelli.htm
No 937, Staff Reports from Federal Reserve Bank of New York
We document the supply chain effects of the most damaging cyberattack in history. The disruptions propagated from the directly hit firms to their customers, causing a four-fold amplification of the initial drop in profits. These losses were larger for affected customers with fewer alternative suppliers. Internal liquidity buffers and increased borrowing, mainly through bank credit lines, helped firms navigate the shock. The cyberattack also led to persisting adjustments to the supply chain network, with affected customers more likely to create new relationships with alternative suppliers and terminate those with the directly hit firms.
Keywords: cyberattacks; supply chains; bank credit (search for similar items in EconPapers)
JEL-codes: E23 G21 G23 L14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac
Note: Revised July 2021.
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