The Value of Corporate Data Resources:A Quasi-Natural Experiment Based on the Implementation of the General Data Protection Regulation
In 2020,the Communist Party of China and the State Council officially identified data as one key factor of production.However,there is little empirical evidence on whether data resources per se have significant value.This could result from the challenges that the ownership of data resources is unclear,their value is hard to measure,and one cannot easily separate the value of data from that of digital technology.Therefore,we investigate the value of corporate data resources by introducing the implementation of the EU's General Data Protection Regulation(GDPR)in 2018 as an exogenous shock to corporate data resources related to personal information.The results indicate that firms affected by GDPR experience a decrease in their market value relative to firms in the control group,indicating that investors in the capital market will respond to such unfavorable changes in corporate data re-sources by adjusting firm value downwards.Our results still hold in a series of robustness tests including parallel trend tests,placebo tests and alternative matching tests.Cross-sectional analyses show that the effect is more pronounced for firms that are more likely to be required to delete data or restrict the use of data by individuals,and for firms that rely heavily on data resources.Further analyses show that the implementation of GDPR increases the sales ex-penses and corporate efforts in data protection,while decreases the free cash flow and analyst coverage.This paper provides causal evidence from the per-spective of capital market pricing on how GDPR affects the value of data resources and sheds light on the legislation of data resources and corporate devel-opment with higher quality.
Data ResourceFirm ValueData FactorHigh-quality DevelopmentCompliance ManagementGDPR
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