A Pilot Study to Assess the Effects of News Coverage Articles about Security Incidents on Stock Prices in Korea

Se-Hyeon Han ()
Additional contact information
Se-Hyeon Han: School of Media Communication, Hanyang University, Seoul 04763, Republic of Korea

JRFM, 2023, vol. 16, issue 10, 1-21

Abstract: This study was conducted to assess the effects of security incidents on the stock prices of firms in Korea. A content analysis of news coverage articles about security incidents was performed. The research questions (RQs) of the current study were as follows: RQ1: this study evaluated whether the news coverage of a security incident can influence an investor’s decision to buy or sell a stock; and RQ2: the study also analyzed whether the type of industry, the amount of damage caused by the incident, and the specific security incident itself would affect how investors assessed a stock’s value. The results of the study indicate the following: (1) news coverage articles about security incidents have a significant effect on stock prices; and (2) the degree of such an effect varies depending on the tone, theme, and category of the news coverage. A more negative tone was associated with a decrease in stock prices. Less negative and neutral tones were associated with an increase in stock prices. In particular, a neutral tone was associated with an increase in stock prices, which was commonly seen in most of the firms experiencing security incidents. Furthermore, the number of news coverage articles about security incidents had no relationship to variations in stock prices. In firms experiencing security incidents, variations in stock prices varied depending on the types of industry, the types of damages, and the type of incident. In conclusion, the current study used an event study and a content analysis of news coverage articles about security incidents to assess their effects on the stock prices of firms. Further studies are warranted to establish the feasibility of this approach in a real-world setting.

Keywords: information and communication technology; firm; stock price; security incidents; damages (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/1911-8074/16/10/425/pdf (application/pdf)
https://www.mdpi.com/1911-8074/16/10/425/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jjrfmx:v:16:y:2023:i:10:p:425-:d:1247488

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().