Effects of Cybersecurity Readiness on Firm Performance: Evidence from Conference Calls

Abstract

This study develops a novel firm-level metric, termed cybersecurity readiness, by leveraging text mining techniques on corporate conference call transcripts to measure a firm’s preparedness and commitment to cybersecurity. Analyzing the impact of cybersecurity readiness this year on financial performance next year, we employ linear regression models and demonstrate that it moderately improves key outcomes such as Return on Assets (ROA) and Earnings Before Interest and Taxes on Assets (EBITAT). By capturing the discourse between executives and external stakeholders, our approach provides a forward-looking and dynamic measure of cybersecurity effectiveness. The findings underscore the strategic importance of cybersecurity readiness, not only as a protective measure but also as a driver of superior financial performance. This research offers empirical evidence linking cybersecurity to firm success and introduces a scalable methodology for evaluating organizational cybersecurity, contributing actionable insights for corporate leaders and policymakers. The code is publicly available.