Market price effects of data security breaches
No Thumbnail Available
Authors
Morse, Edward A.
Raval, Vasant
Wingender, John R., Jr.
Issue Date
2011
Type
Journal Article
Journal Article
Journal Article
Language
Keywords
Alternative Title
Abstract
This study examines the impact of reported breaches in computer security using event study analysis. We use the event-study methodology to measure the magnitude of the effect of data security breach events on the behavior of stock markets. Our data come from security breaches spanning a ten-year period and involving various industries. The findings of the study suggest that there exist abnormal negative stock price returns following the announcement of a breach. Such abnormal negative returns persist over the next several years. Moreover, the source of data breach may moderate the price effect; the market tends to punish more heavily those compromises that could have been avoided with reasonable precautions by the breached company.
Description
Citation
Edward A. Morse, Vasant Raval & John R. Wingender Jr., Market Price Effects of Data Security Breaches, 20 Info. Security J.: A Global Persp. 263 (2011).