The Impact of Intellectual Property Protection on Enterprise Cybersecurity Risk

Abstract

Cybersecurity risks affect an organization's data and intangible assets, while intellectual property (IP) laws promote innovation. This study examines how corporate governance, digital transformation, and IP regulations relate to cybersecurity risk. It investigates whether stronger IP protection increases enterprise cybersecurity risk and whether network governance mediates this relationship under varying institutional enforcement. Using a two-way fixed effects regression with instrumental variables on panel data from 950 publicly listed non-financial firms across 18 countries (2012–2022; 8,547 firm-year observations), the study draws on multiple global datasets. Results show a significant positive link between IP protection intensity and cybersecurity risk (β=0.127, p < 0.01). Network governance partially mediates this relationship, reducing its impact (indirect effect=0.031). Strong institutional enforcement weakens the IP–risk link (β=-0.112, p< 0.05). The study extends appropriability theory by highlighting cybersecurity externalities of IP protection.