Can cross-listing mitigate the impact of an information security breach announcement on a firm's values?
نویسندگان
چکیده
The increase in globalization in the markets has driven firms to adopt online technologies and to cross-list their stocks. Recent studies have consistently found that the announcements of information security breaches (ISBs) are negatively associated with the market values of the announcing firms during the days surrounding the breach announcements. Given the improvement in firms’ information environments and the better protection for investors generated by cross-listing, does cross-listing help firms to reduce the negative impacts caused by their announcements of ISBs? This paper conducts an event study of 120 publicly traded firms (among which 25 cross-list and 95 do not), in order to explore the answer. The results indicate that the impact of ISB announcements on a firm’s stock prices shows no difference between cross-listing firms and non-cross-listing firms. Cross-listing does not mitigate the impact of ISBs announcement on a firm’s market value.
منابع مشابه
The Economic Impact of Information Security Breaches: Firm Value and Intra-industry Effects
IT managers often struggle to justify investments in information security. In addition to standard quantitative analyses such as Return on Security Investment (ROSI), executive management may also want to know what the effect of potential security breaches would be on the market value of a publicly-traded firm. This study attempts to shed light on the issue by examining the impact of informatio...
متن کاملThe Effect of Internet Security Breach Announcements on Market Value: Capital Market Reactions for Breached Firms and Internet Security Developers
Assessing the value of information technology (IT) security is challenging because of the difficulty of measuring the cost of security breaches. An event-study analysis, using market valuations, was used to assess the impact of security breaches on the market value of breached firms. The information-transfer effect of security breaches (i.e., their effect on the market value of firms that devel...
متن کاملIS THERE A COST TO PRIVACY BREACHES? AN EVENT STUDY Security and Assurance
While the literature on information security economics has begun to investigate the stock market impact of security breaches and vulnerability announcements, little more than anecdotal evidence exists on the effects of privacy breaches. In this paper we present the first comprehensive analysis of the impact of a company’s privacy incidents on its market value. We compile a broad data set of ins...
متن کاملIs There a Cost to Privacy Breaches? An Event Study
While the infosec economics literature has begun to investigate the stock market impact of security breaches and vulnerability announcements, little more than anecdotal evidence exists on effects of privacy breaches. In this paper we present the first comprehensive analysis of the impact of a company’s privacy incidents on its market value. We compile a broad data set of instances of exposure o...
متن کاملThe Association Between the Disclosure and the Realization of Information Security Risk Factors
Firms often disclose information security risk factors in public filings such as 10-K reports. The internal information associated with disclosures may be positive or negative. In this paper, we are interested in evaluating how the nature of security risk factors disclosed, which is believed to represent the internal information regarding information security, is associated with future breach a...
متن کامل