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The Effect of Data Theft on a Firm’s Short-Term and Long-Term Market Value

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  • Kuo-Chung Chang

    (Department of Information Management, Yuan Ze University, Chungli 32003, Taiwan)

  • Yu-Kai Gao

    (College of Management, Yuan Ze University, Chungli 32003, Taiwan)

  • Shih-Cheng Lee

    (College of Management, Yuan Ze University, Chungli 32003, Taiwan)

Abstract

The prevalence of the internet as firm’s primary channel of operations and marketing in recent decades has made information security management a critical issue for firms. Yet, previous research on the information security issue have mostly focused on the impact of information security events on firms’ short-term value. Their impact on firms’ long-term value is rarely analyzed. Corporate managers have also largely dismissed the negative long-term impact of information security breaches by considering them as accidental and arguing that their frequency in recent years has instigated a sense of numbness in customers to their regards. Consequently, managers have paid little attention to information security investments. To assess the importance of information security investment, this study examines short-term and long-term stock market assessment of data breaches events at publicly traded companies. The findings of this study offer new insights for firms in assessing information security investment.

Suggested Citation

  • Kuo-Chung Chang & Yu-Kai Gao & Shih-Cheng Lee, 2020. "The Effect of Data Theft on a Firm’s Short-Term and Long-Term Market Value," Mathematics, MDPI, vol. 8(5), pages 1-21, May.
    • Handle: RePEc:gam:jmathe:v:8:y:2020:i:5:p:808-:d:358540
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    Cited by:

    1. Sepideh Ebrahimi & Kamran Eshghi, 2022. "A meta-analysis of the factors influencing the impact of security breach announcements on stock returns of firms," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(4), pages 2357-2380, December.

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