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Repeated data breaches and firm value

Author

Listed:
  • Peng, Jin
  • Zhang, Haofei
  • Mao, Juan
  • Xu, Shouhuai

Abstract

We find that second-time data breaches hurt the firm value more than the respective first breaches, and the damage is most severe for breaches of financial information. Replacing CEOs after the first breach prevents firms from future losses.

Suggested Citation

  • Peng, Jin & Zhang, Haofei & Mao, Juan & Xu, Shouhuai, 2023. "Repeated data breaches and firm value," Economics Letters, Elsevier, vol. 224(C).
    • Handle: RePEc:eee:ecolet:v:224:y:2023:i:c:s0165176523000265
    DOI: 10.1016/j.econlet.2023.111001
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    References listed on IDEAS

    as
    1. Jason K. Deane & David M. Goldberg & Terry R. Rakes & Loren P. Rees, 2019. "The effect of information security certification announcements on the market value of the firm," Information Technology and Management, Springer, vol. 20(3), pages 107-121, September.
    2. Tosun, Onur Kemal, 2021. "Cyber-attacks and stock market activity," International Review of Financial Analysis, Elsevier, vol. 76(C).
    3. Kamiya, Shinichi & Kang, Jun-Koo & Kim, Jungmin & Milidonis, Andreas & Stulz, René M., 2021. "Risk management, firm reputation, and the impact of successful cyberattacks on target firms," Journal of Financial Economics, Elsevier, vol. 139(3), pages 719-749.
    4. Wang, Heng Emily & Wang, Qin Emma & Wu, Wentao, 2022. "Short selling surrounding data breach announcements," Finance Research Letters, Elsevier, vol. 47(PB).
    5. Claire Lending & Kristina Minnick & Patrick J. Schorno, 2018. "Corporate Governance, Social Responsibility, and Data Breaches," The Financial Review, Eastern Finance Association, vol. 53(2), pages 413-455, May.
    6. Kevin M. Gatzlaff & Kathleen A. McCullough, 2010. "The Effect of Data Breaches on Shareholder Wealth," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 13(1), pages 61-83, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Repeated data breaches; Event study; Cumulative abnormal returns (CARs); Firm value; Cybersecurity;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • K24 - Law and Economics - - Regulation and Business Law - - - Cyber Law

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