Data breaches (hacking) and trade credit

This study examines the relationship between data breaches (hacking) and trade credit for U.S. firms. Employing a staggered difference-in-differences approach, we observe that breached firms face shorter payable periods from suppliers than the control group. Data breaches increase the operational risk of breached firms. Suppliers associate high information risk with breached firms. Our findings remain robust to alternative specifications and are more pronounced for firms with no in-house IT expertise and an increased number of stolen records. Overall, our findings suggest that supplier firms become more prudent with the extension of trade credit after data breaches.