Cyberattacks and Impact on Bond Valuation

28 Pages Posted: 18 Apr 2019

See all articles by Subramanian R. Iyer

Subramanian R. Iyer

University of New Mexico

Betty J. Simkins

Oklahoma State University - Stillwater - Department of Finance

Heng Emily Wang

Le Moyne College, Madden School of Business

Date Written: March 21, 2019

Abstract

We examine the impact of cyberattacks on bondholder wealth. Unlike stockholders, bondholders do not react in the short-term but do experience negative returns in the one-month event window. Compared to similar firms not subject to cyberattacks, we find that bondholders lost approximately 2% of their wealth within a one-month period surrounding the attack (a loss of $3.8 million on average). In this decade of advanced cybersecurity, bondholders still suffer similar losses compared to the last decade. To our knowledge, this is the first study that analyzes the impact of cyberattacks on bondholder wealth.

Keywords: cyber risk, cyberattacks, bondholder wealth

JEL Classification: G10, G12, G13

Suggested Citation

Iyer, Subramanian R. and Simkins, Betty J. and Wang, Heng, Cyberattacks and Impact on Bond Valuation (March 21, 2019). Available at SSRN: https://ssrn.com/abstract=3357815 or http://dx.doi.org/10.2139/ssrn.3357815

Subramanian R. Iyer

University of New Mexico ( email )

MSC 05-3090
U of New Mexico
Albuquerque, NM 87131
United States

Betty J. Simkins (Contact Author)

Oklahoma State University - Stillwater - Department of Finance ( email )

336 Business Building
Stillwater, OK 74078-4011
United States
405-744-8625 (Phone)
405-744-5180 (Fax)

HOME PAGE: http://spears.okstate.edu/~simkins

Heng Wang

Le Moyne College, Madden School of Business ( email )

Syracuse, NY 13204
United States

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