Effects of data breaches from user-generated content: A corporate reputation analysis

A threat for a growing number offirms in various industries is the occurrence of different breaches ofsensitive corporate data. These critical events represent vulnerability forfirms' corporate reputations,whose multiple dimensions are affected by customers negative perceptions in various ways. Further, inthe Industry 4.0 era, the redundancy of scandals on social media can exacerbate negative effects. Thispaper reports an investigation into the effects of data breaches on corporate reputation dimensions. Inthis context, the study conducted latent Dirichlet allocation analysis on social media user-generatedcontent (UGC) for a sample of 35firms in nine industries that suffered a data breach incident be-tween 2013 and 2016. Incidents have been categorized into three categories:“intentional and internal,”“unintentional and internal,”and“intentional and external”data breaches. The aim of the study was todiscover how reputational dimensions changed after these critical events and to identify the differencesamong the types of data breaches.Results reveal that after critical events, more reputational dimensions appear to be relevant. Whilebefore critical events, users typically discuss the“perceived quality”of afirm's offer, after all three typesof data breaches, users also pay attention to“customer orientation”and“corporate performance”di-mensions. Another key reputation dimension, especially after intentional and internal data breaches, isthe“firm as employer,”particularly in the context of a lack of investment in training regarding theseevents.Thesefindings provide key insights for academics and practitioners to understand large-scale databreaches effects and reputational drawbacks after such incidents