Pirates without Borders: The Propagation of Cyberattacks through Firms' Supply Chains

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Staff Reports

Pirates without Borders: The Propagation of Cyberattacks through Firms’ Supply Chains

Number 937
July 2020 Revised July 2021

JEL classification: E23, G21, G23, L14

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

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.

Available only in PDF

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.

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