Market Price Effects of Data Security Breaches

Research output: Contribution to journalArticle

12 Scopus citations

Abstract

This study examines the impact of reported breaches in computer security using event study analysis. We use the event-study methodology to measure the magnitude of the effect of data security breach events on the behavior of stock markets. Our data come from security breaches spanning a ten-year period and involving various industries. The findings of the study suggest that there exist abnormal negative stock price returns following the announcement of a breach. Such abnormal negative returns persist over the next several years. Moreover, the source of data breach may moderate the price effect; the market tends to punish more heavily those compromises that could have been avoided with reasonable precautions by the breached company.

Original languageEnglish (US)
Pages (from-to)263-273
Number of pages11
JournalInformation Security Journal
Volume20
Issue number6
DOIs
StatePublished - Jan 1 2011

All Science Journal Classification (ASJC) codes

  • Software
  • Computer Science Applications
  • Information Systems and Management

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