Market Reactions to Information Security Breach Announcements: An Empirical Analysis

Authors:
Karthik Kannan;Jackie Rees;Sanjay Sridhar
Affiliations:
Krannert Graduate School of Management, Purdue University;Krannert Graduate School of Management, Purdue University;Fixed Income Group, Merrill Lynch
Venue:
International Journal of Electronic Commerce
Year:
2007

Citing 7
Cited 9

Security in computing

Security in computing
Creating Business Advantage in the Information Age

Creating Business Advantage in the Information Age
The Impact of E-Commerce Announcements on the Market Value of Firms

Information Systems Research
Analyzing security costs

Communications of the ACM - E-services: a cornucopia of digital offerings ushers in the next Net-based evolution
The economic cost of publicly announced information security breaches: empirical evidence from the stock market

Journal of Computer Security - IFIP 2000
The Effect of Internet Security Breach Announcements on Market Value: Capital Market Reactions for Breached Firms and Internet Security Developers

International Journal of Electronic Commerce
Examining the shareholder wealth effects of announcements of newly created CIO positions

MIS Quarterly

On the Effectiveness of Privacy Breach Disclosure Legislation in Europe: Empirical Evidence from the US Stock Market

NordSec '09 Proceedings of the 14th Nordic Conference on Secure IT Systems: Identity and Privacy in the Internet Age
Assessing the severity of phishing attacks: A hybrid data mining approach

Decision Support Systems
The impact of information security breaches: Has there been a downward shift in costs?

Journal of Computer Security
The more, the merrier? how the number of partners in a standard-setting initiative affects shareholder’s risk and return

MIS Quarterly
Safe Contexts for Interorganizational Collaborations Among Homeland Security Professionals

Journal of Management Information Systems
Did IT consulting firms gain when their clients were breached?

Computers in Human Behavior
A hybrid decision tree based methodology for event studies and its application to e-commerce initiative announcements

ACM SIGMIS Database
Metamodeling to Control and Audit E-Commerce Web Applications

International Journal of Electronic Commerce
Patch Release Behaviors of Software Vendors in Response to Vulnerabilities: An Empirical Analysis

Journal of Management Information Systems

Quantified Score

Hi-index	0.00

Visualization

Abstract

Losses due to information security breaches are notoriously difficult to measure. An event study of the effect of such breaches on financial performance found that they do not earn significantly negative abnormal returns. To verify whether this finding resulted from the aggregation of data across different characteristics (e.g., the nature of the breaches, the types of firms, the time periods of the study) the impact of each characteristic was analyzed. Again the results were not significantly negative. The study found that a negative bias followed the events of September 11, 2001. It also found that there was a difference in investor reactions to events during the dot-com era, when firms earned higher negative abnormal returns, and after the dot-com era. The implications are discussed.