Security Breaches and Firm Value

Bolster Paul, Pantalone Coleen H and Trahan Emery A
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Bolster Paul: Northeastern University
Pantalone Coleen H: Northeastern University
Trahan Emery A: Northeastern University

Journal of Business Valuation and Economic Loss Analysis, 2010, vol. 5, issue 1, 13

Abstract: Security breaches may be a normal risk of doing business, or they may result in economic losses and changes in business valuation. A small number of studies outside the finance literature find mixed results regarding the economic impact of security breaches. In this paper, we examine a large sample to determine whether breaches result in significant economic losses and whether the announcement venue has an impact on business valuation. We find a negative and significant impact on firm value when the breach is announced in one of four major news outlets. When the announcement is elsewhere, the impact is minimal.

Keywords: security breaches; data breaches; event study; valuation (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (4)

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DOI: 10.2202/1932-9156.1081

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