Journal
INFORMATION & MANAGEMENT
Volume 52, Issue 3, Pages 337-347Publisher
ELSEVIER SCIENCE BV
DOI: 10.1016/j.im.2014.12.006
Keywords
Cost of capital; Data theft; Event study; Information security; Systematic risk
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Based on recent hacker attacks targeting consumer electronics companies, this article investigates the direct financial consequences for the owners of victim companies. To quantify this effect, we analyze whether the companies' stock returns react to announcements of data theft. In addition, we also analyze the effects of such thefts on systematic risk. The results indicate that the share prices of both directly affected and similar companies decrease. However, market players do not change their evaluations of systematic risk, and hence, companies need not expect a higher cost of capital in the following years. (C) 2014 Elsevier B.V. All rights reserved.
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