Cyber-attacks and stock market activity

Onur Kemal Tosun

International Review of Financial Analysis, 2021, vol. 76, issue C

Abstract: I study how financial markets react to unexpected corporate security breaches in the short and the long-term. The main results show that daily excess returns drop, trading volume increases due to selling pressure, and liquidity improves upon the public disclosure of first-time corporate hacking events. The evidence from the search frequency in Google suggests that such short-lived market reaction is due to increasing investors' attention. Cyber-attacks affect firms' policies in the long run, up to five years after the security breach announcement. These results are consistent with the hypothesis that security breaches represent unexpected negative shocks to firms' reputations.

Keywords: Security breaches; Cyber-attacks; Market activity; Long-term impact; Investors' attention (search for similar items in EconPapers)
JEL-codes: G11 G14 G32 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:76:y:2021:i:c:s1057521921001319

DOI: 10.1016/j.irfa.2021.101795

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