How Data Breach Notification Laws reshape corporate debt maturity structure

Data are increasingly recognised as critical assets, yet their absence from financial reports limits research on their impact. Exploiting the staggered adoption of US Data Breach Notification (DBN) laws, we examine how these mandatory data breach disclosure regulations affect firms’ debt maturity structures by altering the ex ante information environment and anticipated costs associated with potential future breach disclosures. We find that DBN laws lead firms to rely more on short-term debt financing, particularly among those with higher credit risk, limited financial flexibility and greater information asymmetry. Further analysis reveals that DBN laws influence firms’ debt instrument choices and are associated with improved financial reporting quality, investment efficiency and cash holdings.