Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/271786 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10142
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper studies the impact of technological architecture around data storage and processing on the performance of large financial corporations after being exposed to more stringent data privacy regulations. A modular approach to cloud adoption – which reflects in the lack of data interoperability and reliance on microservices architecture – significantly constrains corporations' ability to adapt after the GDPR became enforceable. We hypothesize that a modular approach to cloud adoption leads to uncontrolled scaling and data silos that hinder coordination and regulatory compliance. Using a difference-in-differences regression design, we find that establishment revenues lower by 30% among corporations substantially exposed to GDPR. Other corporations do not experience similar losses. We also find evidence consistent with theory using two alternative measures based on cloud vendor configurations.
Subjects: 
technological architecture
cloud computing
ecosystem
GDPR
organisation design
Document Type: 
Working Paper
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