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Market-Based Solutions to Vital Economic Issues


Kenan Institute 2024 Grand Challenge: Business Resilience
Market-Based Solutions to Vital Economic Issues
Jun 18, 2023

Cyberattacks, Media Coverage and Municipal Finance


We investigate the role of information dissemination about cyberattacks through major newswires on municipal finance. Employing a difference-in-differences approach to identify causal effects, we find that county-level cyberattacks covered by the media cause increases in new offer yields and reduce bond issuance. Heterogeneous effects related to investor clientele suggest a capital supply channel. Municipalities respond to financing shortages by drawing their cash holdings and reducing their more elastic investments. Overall, awareness of cybersecurity risk hinders municipalities’ access to capital and restricts their ability to provide public services and infrastructure.

Note: Research papers posted on SSRN, including any findings, may differ from the final version chosen for publication in academic journals.  

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