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

Kuo-Chung Chang, Yu-Kai Gao and Shih-Cheng Lee
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Kuo-Chung Chang: Department of Information Management, Yuan Ze University, Chungli 32003, Taiwan
Yu-Kai Gao: College of Management, Yuan Ze University, Chungli 32003, Taiwan
Shih-Cheng Lee: College of Management, Yuan Ze University, Chungli 32003, Taiwan

Mathematics, 2020, vol. 8, issue 5, 1-21

Abstract: 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.

Keywords: data breach; market value; event study methodology (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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