Valuing companies' data safety

: an empirical analysis of investors' and customers' responses to cybersecurity failures

Abstract

Cyber breaches are becoming more and more frequent due to the increasing connection allowed by technology. This implies a loss of sensitive data about companies or clients. Cyber breaches can have several causes and can happen in different forms. This paper aims to analyze how cyber data leaks affect the value of publicly traded firms by considering a sample of US companies that experienced breaches between 2009 and 2019. The research will provide some consensus about how customers react to cyber breach announcements. Both investors and customers are expected to react negatively to such events. Results show that the market reaction to such announcements is negative and significant, and cumulative abnormal returns are negatively and significantly impacted by the characteristics of the breach. However, customers’ reactions are not as negative as investors9 reactions, indicating that the two categories of stakeholders consider different aspects to value their relationship with companies.

Date of Award	4 Feb 2025
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	José D. Garcia Revelo (Supervisor)