Security Breaches and Firm Value
Security breaches may be a normal risk of doing business, or they may result in economic losses and changes in business valuation. A small number of studies outside the finance literature find mixed results regarding the economic impact of security breaches. In this paper, we examine a large sample to determine whether breaches result in significant economic losses and whether the announcement venue has an impact on business valuation. We find a negative and significant impact on firm value when the breach is announced in one of four major news outlets. When the announcement is elsewhere, the impact is minimal.
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Volume (Year): 5 (2010)
Issue (Month): 1 (April)
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- Brown, Stephen J. & Warner, Jerold B., 1985. "Using daily stock returns : The case of event studies," Journal of Financial Economics, Elsevier, vol. 14(1), pages 3-31, March.
- Anat Hovav & John D'Arcy, 2003. "The Impact of Denial-of-Service Attack Announcements on the Market Value of Firms," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 6(2), pages 97-121, 09.
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