Cybercrime Laws and Firm Valuation: Worldwide Evidence

Using a unique dataset on the staggered adoption of cybercrime laws across 83 countries and tracking 60545 firms from 1990 to 2023, we find that cybercrime laws positively impact firm value. Our results hold across various robustness tests, including the exclusion of major economies, adjustments to event windows, and propensity/ entropy matched samples. The valuation effect is stronger among software-intensive firms, high-tech industries, financially constrained firms, and high-risk firms. Industry-level analysis shows a pronounced impact in less regulated sectors. National governance further strengthens the positive valuation impact of these laws. Channel analysis suggests that cybercrime laws mitigate cybersecurity risk, encourage corporate risk-taking, and increase M&A activity while reducing transaction frictions. Overall, our study highlights how cybercrime laws enhance corporate outcomes by supporting firm valuation, encouraging risk-taking, and stimulating market activity, particularly in environments with strong national governance and financial development.