Staff Reports
Pirates without Borders: The Propagation of Cyberattacks through Firms’ Supply Chains
Number 937
July 2020

JEL classification: E23, G21, G23, L14

Authors: Matteo Crosignani, Marco Macchiavelli, and André F. Silva

We document the propagation effects through supply chains of the most damaging cyberattack in history and the important role of banks in mitigating its impact. Customers of directly hit firms saw reductions in revenues, profitability, and trade credit relative to similar firms. The losses were larger for customers with fewer alternative suppliers and suppliers producing high-specificity inputs. Internal liquidity buffers and increased borrowing, mainly through bank credit lines at higher rates due to increased risk, helped affected customers to maintain investment and employment. However, the shock led to persisting adjustments to the supply chain network.

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AUTHOR DISCLOSURE STATEMENT(S)
Matteo Crosignani
I declare that I have no relevant or material financial interests that relate to the research described in the paper "Pirates without Borders: The Propagation of Cyberattacks through Firms' Supply Chains."

Marco Macchiavelli
I, Marco Macchiavelli, declare that I have no relevant or material financial interests that relate to the research described in this paper.

André F. Silva
I, André F. Silva, declare that I have no relevant or material financial interests that relate to the research described in this paper.