This paper investigates how data breaches influence firms' innovation strategies, focusing specifically on R&D expenses and patent applications. We adapt theory from the attention-based view, specifically attentional engagement and vigilance, to explore how firms respond to data breaches from an innovation perspective. Drawing on the concept of learning from failure, we examine how both focal firms and their industry peers make strategic adjustments following such events. We argue that data breaches, whether experienced internally or by competitors, shift organizational attention and ultimately reshape firms' innovation strategies.
