A Review of Research on Data Security Risk: Consequences, Mechanisms, and Response

ABSTRACT Data security risk has evolved from a peripheral technical concern into a fundamental determinant of corporate strategy and financial stability. This review synthesizes over 130 high‐quality studies spanning economics, finance, and management, documenting how data breaches—including consumer privacy violations and intellectual property theft—affect firm value, investor behavior, and systemic risk. We trace the evolution of this literature from early event‐study methodologies to sophisticated risk measurement frameworks employing natural language processing (NLP) and large language models (LLMs), while examining governance mechanisms, insurance markets, and regulatory design. Our analysis identifies critical gaps in long‐term impact assessment, cross‐country institutional comparisons, and AI‐era vulnerabilities, and outlines an integrative research agenda for understanding and mitigating digital risk in the modern economy.