Privacy regulation and firm performance: Estimating the GDPR effect globally.

This paper examines how privacy regulation shaped firm performance. Controlling for firm and country‐industry‐year unobserved characteristics, we compare the outcomes of firms at different levels of exposure to EU markets, before and after the enforcement of the General Data Protection Regulation (G...

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Published in:Economic Inquiry Vol. 62; no. 3; pp. 1074 - 1090
Main Authors: Frey, Carl Benedikt, Presidente, Giorgio
Format: Article
Published: Wiley-Blackwell Jul2024
Subjects:
Online Access:View this record in EBSCOhost
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      tig:
        atl: Privacy regulation and firm performance: Estimating the GDPR effect globally.
      aug:
        au:
          Frey, Carl Benedikt
          Presidente, Giorgio
        affil:
          Oxford Internet Institute, University of Oxford, Oxford, UK
          Oxford Martin School, University of Oxford, Oxford, UK
          Institute for European Policy‐Making, Bocconi University, Milan, Italy
      su:
        Small business
        Privacy
        Organizational performance
        General Data Protection Regulation, 2016
        Personally identifiable information
      sug:
        subj:
          Small business
          Privacy
          Organizational performance
          General Data Protection Regulation, 2016
          Personally identifiable information
      keyword:
        firm performance
        GDPR
        innovation
        patenting
        privacy regulation
        firm performance
        GDPR
        innovation
        patenting
        privacy regulation
      ab: This paper examines how privacy regulation shaped firm performance. Controlling for firm and country‐industry‐year unobserved characteristics, we compare the outcomes of firms at different levels of exposure to EU markets, before and after the enforcement of the General Data Protection Regulation (GDPR) in 2018. We find that the GDPR had the unintended consequence of harming the profitability of companies targeting European consumers through the cost channel. Technology firms experienced a 2.1% decline in profits, but not in sales. The GDPR increased extra expenses, added to firms wage bills, and accelerated patenting in GDPR‐related technology fields. The main burdens have been borne by smaller companies.
      pubtype: Academic Journal
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      src: R
    language: English
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