The Effect of Data Theft on a Firm’s Short-Term and Long-Term Market Value

The prevalence of the internet as firm’s primary channel of operations and marketing in recent decades has made information security management a critical issue for firms. Yet, previous research on the information security issue have mostly focused on the impact of information security events on fir...

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Bibliographic Details
Published in:Mathematics (Basel) 2020-05, Vol.8 (5), p.808
Main Authors: Chang, Kuo-Chung, Gao, Yu-Kai, Lee, Shih-Cheng
Format: Article
Language:English
Subjects:
Costs
Criminal investigations
data breach
Data integrity
Efficient markets
event study methodology
Information management
Investment
Investments
Market value
Mathematics
Robbery
Securities markets
Security management
Short term
Studies
Theft
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Summary:The prevalence of the internet as firm’s primary channel of operations and marketing in recent decades has made information security management a critical issue for firms. Yet, previous research on the information security issue have mostly focused on the impact of information security events on firms’ short-term value. Their impact on firms’ long-term value is rarely analyzed. Corporate managers have also largely dismissed the negative long-term impact of information security breaches by considering them as accidental and arguing that their frequency in recent years has instigated a sense of numbness in customers to their regards. Consequently, managers have paid little attention to information security investments. To assess the importance of information security investment, this study examines short-term and long-term stock market assessment of data breaches events at publicly traded companies. The findings of this study offer new insights for firms in assessing information security investment.
ISSN:2227-7390
2227-7390
DOI:10.3390/math8050808