Stock Market Response to Information Security Breach: A Study Using Firm and Attack Characteristics
Saini Das, Arunabha Mukhopadhyay, Manoj Anand · Journal of Information Privacy and Security · 2012
The recent global surge in information security breaches emphasizes the importance of their impact determination for proper risk assessment. In this paper we used event study to compute the cumulative abnormal response (CAR) of the stock market to publicly announced breaches on a sample of Indian and US firms. We also used linear regression and moderation analysis to identify the factors that affect CAR individually and in combination with each other. From regression analysis, firm type, firm size and Damage Potency of the attack emerged as factors that individually impacted CAR. Further, moderation analysis revealed that Denial of Service attacks on e-commerce companies and information theft attacks on BFSI companies generated significantly negative CAR. We also observed that if a subsidiary company is breached, then the parent's stock market performance is not significantly negatively impacted. However, if a vendor suffers a breach, then the client is significantly negatively affected in the stock market.