Do Security Breaches Matter? The Shareholder Puzzle

Forthcoming, European Financial Management

33 Pages Posted: 26 Sep 2019

See all articles by Allen Michel

Allen Michel

Boston University, Questrom School of Business

Jacob Oded

Tel Aviv University - Coller School of Management

Israel Shaked

Boston University - Questrom School of Business; Michel Shaked Group

Multiple version iconThere are 2 versions of this paper

Date Written: July 1, 2019

Abstract

This article analyzes the effect of computer breaches on publicly traded equities from 2005 to 2017. An event study is performed and breaches analyzed conditioned on whether the breach announcement has been made in the mainstream media or through other channels. We find that in the period prior to the announcement date in the media, the mean abnormal return is negative, reflecting a likely leakage of information. In the period following the announcement date, the mean abnormal return is positive, often more than offsetting the previous declines. The findings have important implications for analysts, portfolio managers, institutional investors, and regulators.

Suggested Citation

Michel, Allen and Oded, Jacob and Shaked, Israel, Do Security Breaches Matter? The Shareholder Puzzle (July 1, 2019). Forthcoming, European Financial Management, Available at SSRN: https://ssrn.com/abstract=3455524 or http://dx.doi.org/10.2139/ssrn.3455524

Allen Michel

Boston University, Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States

Jacob Oded (Contact Author)

Tel Aviv University - Coller School of Management ( email )

Ramat Aviv
Tel-Aviv, 6997801
Israel

Israel Shaked

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States

Michel Shaked Group ( email )

2 Park Plaza #500
Boston, MA 02116
United States

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