The increasing digitization of healthcare systems has amplified exposure to cybersecurity threats, transforming data breaches from isolated organizational incidents into sources of systemic economic risk. This study quantifies the economic spillover effects of healthcare data breaches using a multi-period panel regression framework that integrates breach incident data with firm-level financial indicators and macroeconomic controls. By exploiting longitudinal variation across healthcare entities and time, the analysis identifies both direct performance impacts on breached organizations and indirect spillover effects transmitted through industry-level and peer-group exposure. Dynamic specifications reveal that spillover effects are primarily contemporaneous but economically significant, with evidence of persistence in specific subgroups. The results further demonstrate pronounced heterogeneity, with smaller firms and entities operating in concentrated markets experiencing substantially larger spillover-induced performance declines. Robustness checks across alternative model specifications and exposure definitions confirm the stability of these findings. Collectively, the study advances cybersecurity economics by positioning healthcare data breaches as system-level economic shocks and provides policy-relevant insights for cybersecurity investment, insurance pricing under correlated risk, and coordinated regulatory disclosure frameworks within healthcare ecosystems.
Genevieve Donkor Armah*1, Idoko Peter Idoko2, Yewande Iyimide Adeyeye3, Lawrence Anebi Enyejo4, Azonuche Tony Isioma5 (2024) studied this question.