The Effect of Internet Security Breach Announcements on Market Value: Capital Market Reactions for Breached Firms and Internet Security Developers

@article{Cavusoglu2004TheEO,
  title={The Effect of Internet Security Breach Announcements on Market Value: Capital Market Reactions for Breached Firms and Internet Security Developers},
  author={Huseyin Cavusoglu and Birendra K. Mishra and Srinivasan Raghunathan},
  journal={International Journal of Electronic Commerce},
  year={2004},
  volume={9},
  pages={104 - 70}
}
Assessing the value of information technology (IT) security is challenging because of the difficulty of measuring the cost of security breaches. An event-study analysis, using market valuations, was used to assess the impact of security breaches on the market value of breached firms. The information-transfer effect of security breaches (i.e., their effect on the market value of firms that develop security technology) was also studied. The results show that announcing an Internet security breach… 
Estimating the market impact of security breach announcements on firm values
TLDR
The results indicated that, on average, the announcement of a corporate security breach had a negative impact of about 1% of the market value of the firm during the days surrounding the event.
Financial Impact of Information Security Breaches on Breached Firms and their Non-Breached Competitors
TLDR
The study reveals statistically significant evidence of the presence of intra-industry information transfer for some types of security breaches, and evidence of contagion effects, but no similar evidence concerning competition effect.
The effect of information security breaches on stock returns: is the cyber crime a threat to firms?
A very debated issue in recent years is the cyber crime and its impact on market returns and reputation of firms. The issue is made particularly actual by the proliferation of information technology
Exploring the characteristics of Internet security breaches that impact the market value of breached firms
TLDR
The results of the DT-based analysis indicate that both attack and firm characteristics determine CAR, and provides an interpretable model in the form of understandable and actionable rules that may be used by decision makers.
Financial Performance Impacts of Information Security Breaches
Previous research has found that information security breaches can impact the market value of the firm because the reputation of the firm has suffered and the market assumes that revenues will
The Economic Impact of Security Breaches on Publicly Traded Corporations: An Empirical Investigation
TLDR
The present research conducts an event study to investigate the impact of publicly announced security breaches on the market value of the breached companies and utilizes the cumulative abnormal returns, risk shifts, and volume changes to measure this impact.
The impact of information security breaches: Has there been a downward shift in costs?
By analyzing evidence of stock returns using a sophisticated market model over a long period and over two distinct and naturally arising sub-periods, this study helps resolve conflicting evidence
Investigating the impact of publicly announced information security breaches on organizational performance
This paper examines the impact of information security breaches on organizational performance. Up to now, there are only a few previous studies that investigated the stock market reaction of security
Information security breaches and IT security investments: Impacts on competitors
TLDR
Substantial evidence is found supporting the hypothesis that information security breaches do, indeed, have a competition effect: when one firm is breached, its competitors have opportunities to absorb market power.
Stock Market Response to Information Security Breach: A Study Using Firm and Attack Characteristics
Abstract The recent global surge in information security breaches emphasizes the importance of their impact determination for proper risk assessment. In this paper we used event study to compute the
...
1
2
3
4
5
...

References

SHOWING 1-10 OF 127 REFERENCES
The Impact of Information Technology Investment Announcements on the Market Value of the Firm
TLDR
Empirical evidence indicates that, on average, IT investments are zero net present value NPV investments; they are worth as much as they cost; innovative IT investments, however, increase the value of the firm.
The Impact of E-Commerce Announcements on the Market Value of Firms
TLDR
The first empirical test of the dot com effect is presented, validating the popular notion that capital markets recognize the transformational potential of e-commerce and expect significant future benefits to firms entering into ecommerce arrangements.
Vertical Information Transfers: The Association between Retailers' Sales Announcements and Suppliers' Security Returns
Accounting research has documented an association between the occurrence of at least some types of disclosures made by a firm (e.g., earnings announcements, accounting changes, or capital structure
Research Report: A Reexamination of IT Investment and the Market Value of the Firm - An Event Study Methodology
TLDR
Positive excess return for smaller firms shows that smaller firms can leverage the lower price/performance ratio of new IT and reap greater rewards from IT investments than larger firms.
Managerial Actions, Stock Returns, and Earnings: The Case of Business-to-Business Internet Firms
In this study we investigate the valuation implications of managerial actions undertaken by 57 Internet firms engaged in Business-to-Business (B2B) e-commerce. We classify 3,007 managerial actions
The effect of supply chain glitches on shareholder wealth
TLDR
It is found that larger firms experience a less negative market reaction, and firms with higher growth prospects experience a more negative reaction to glitches, suggesting that the market has always viewed glitches unfavorably.
Intra-industry information transfers associated with earnings releases
Abstract The impact that a firm's earnings releases have on the stock prices of other firms in its industry is examined. For an identifiable sub-set of firms, the results are consistent with a
The differential information hypothesis, firm size, and earnings information transfer: An empirical investigation
Abstract This study examines the effects of the sizes of the announcing and non-announcing firms on information transfers. Atiase's [Atiase RK. Predisclosure information, firm capitalization and
MEASURING SECURITY PRICE PERFORMANCE
Event studies focus on the impact of particular types of firm-specific events on the prices of the affected firms’ securities. In this paper, observed stock return data are employed to examine
The relationship between return and market value of common stocks
This study examines the empirical relattonship between the return and the total market value of NYSE common stocks. It is found that smaller firms have had htgher risk adjusted returns, on average,
...
1
2
3
4
5
...