The Deterrent and Displacement Effects of Information Security Enforcement: International Evidence
25 Pages Posted: 3 Mar 2008 Last revised: 28 Sep 2008
Date Written: April 21, 2008
Abstract
We adapt the event study methodology from research in financial economics to study the impact of government enforcement and economic opportunities on information security attacks. We found limited evidence that domestic enforcement deters attacks within the country. However, we found compelling evidence of a displacement effect: U.S. enforcement substantially increases attacks originating from other countries. We also found strong evidence that attackers are economically motivated in that the number of attacks is increasing in the U.S. unemployment rate. Our findings were robust to differences in the effective time window of enforcement, and measurement of vulnerabilities.
Keywords: Information security, attacks, enforcement, unemployment, economics
JEL Classification: A10, E24, G14, L86, K42
Suggested Citation: Suggested Citation