« Back to Results

Media Coverage, Alternative Facts, War and Cyberwarfare

Paper Session

Saturday, Jan. 5, 2019 10:15 AM - 12:15 PM

Hilton Atlanta, 403
Hosted By: Peace Science Society International
  • Chair: Carlos Seiglie, Rutgers University

What Is the Impact of Successful Cyberattacks on Target Firms?

Shinichi Kamiya
,
Nanyang Technological University
Jun-Koo Kang
,
Nanyang Technological University
Jungmin Kim
,
Hong Kong Polytechnic University
Andreas Milidonis
,
University of Cyprus
René Stulz
,
Ohio State University

Abstract

We examine which firms are targets of successful cyberattacks and how they are affected. We find that cyberattacks are more likely to occur at larger and more visible firms, more highly valued firms, firms with more intangible assets, and firms with less board attention to risk management. These attacks affect firms adversely when consumer financial information is appropriated, but seem to have little impact otherwise. Attacks where consumer financial information is appropriated are associated with a significant negative stock market reaction, an increase in leverage following greater debt issuance, a deterioration in credit ratings, and an increase in cash flow volatility. These attacks also affect sales growth adversely for large firms and firms in retail industries, and there is evidence that they decrease investment in the short run. Affected firms respond to such attacks by cutting the CEO’s bonus as a fraction of total compensation, by reducing the risk-taking incentives of management, and by taking actions to strengthen their risk management. The evidence is consistent with cyberattacks increasing boards’ assessment of target firm risk exposures and decreasing their risk appetite.

War of the Waves: Radio and Resistance During World War II

Stefano Gagliarducci
,
University of Rome
Massimiliano Gaetano Onorato
,
University of Bologna
Francesco Sobbrio
,
Guido Carli University (LUISS )
Guido Tabellini
,
Bocconi University

Abstract

What is the role of the media in coordinating and mobilizing insurgency against a foreign military occupation? We analyze this question in the context of the Nazi-fascist occupation of Italy during WWII. We study the effect of BBC radio (Radio Londra) on the intensity of internal resistance to the Nazi-fascist regime. By exploiting variations in monthly sunspot activity that affect the sky-wave propagation of BBC broadcasting towards Italy, we show that BBC radio had a strong impact on political violence. We provide further evidence to document that BBC radio played an important role in coordinating resistance activities, but had no lasting role in motivating the population against the fascist regime.

Facts, Alternative Facts, and Fact Checking in Times of Post-Truth Politics

Oscar David Barrera Rodriguez
,
Paris School of Economics
Sergei Guriev
,
Sciences Po
Emeric Henry
,
Sciences Po
Ekaterina Zhuravskaya
,
Paris School of Economics

Abstract

How persuasive are "alternative facts" i.e., false statements by populist politicians, in convincing voters? How effective is fact checking in countervailing alternative facts? We conduct a randomized online experiment to evaluate the impact of alternative facts and fact checking on knowledge, beliefs, and political preferences of voters in the context of the 2017 French presidential election campaign. Marine Le Pen (MLP), the extreme-right candidate who reached the runoff, regularly used alternative facts in support of her policy proposals, to which mainstream media responded with systematic fact checking. We expose randomly selected subgroups of a sample of 2480 voting-age French to quotes from MLP and/or real facts. The results are as follows. First, alternative facts are highly persuasive. Second, fact checking improves factual knowledge of voters, but does not have an impact on voters' policy conclusions or support for MLP. Third, providing only the true facts backfires by increasing political support for MLP compared to a control group, although to a smaller extent than alternative facts. Finally, heterogeneity of voters with respect to prior voting choices and prior knowledge is important for the effect of treatments on political preferences.

Insecurity and Industrial Organization: Evidence from Afghanistan

Joshua Evan Blumenstock
,
University of California-Berkeley
Tarek Ghani
,
Washington University-St. Louis
Sylvan Herskowitz
,
International Food Policy Research Institute (IFPRI)
Ethan Kapstein
,
Arizona State University
Ott Toomet
,
University of Washington
Thomas Scherer
,
University of California-San Diego

Abstract

One-fifth of the world's population lives in countries affected by fragility, violence and conflict, impeding long-term economic growth. However, little is known about how firms respond to local changes in security, partly because of the difficulty of measuring firm activity in these settings. This paper presents a novel methodology for observing private sector activity using mobile phone metadata. Using Afghanistan as the empirical setting, the analysis combines mobile phone data from over 2,300 firms with data from several other sources to develop and validate measures of firm location, size, and economic activity. Combining these new measures of firm activity with geocoded data on violent events, the paper investigates how the private sector in Afghanistan responds to insecurity. The findings indicate that firms reduce presence in districts following major increases in violence, that these effects persist for up to six months, and that larger firms are more responsive to violence. The paper concludes with a discussion of potential mechanisms, firms' strategic adaptations, and implications for policymakers.
Discussant(s)
Solomon W. Polachek
,
State University of New York-Binghamton
David Slichter
,
State University of New York-Binghamton
Carmen Carrion Flores
,
Syracuse University
Phanindra V. Wunnava
,
Middlebury College & IZA
JEL Classifications
  • F5 - International Relations, National Security, and International Political Economy
  • H8 - Miscellaneous Issues