A global comparison of corporate value adjustments to news of cyber-attacks

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Karen M. Hogan ORCID logo


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The growing threat of cyber breach has become one of the most feared risks corporations around the world are currently dealing with. This paper uses a methodology similar to Hogan, Olson, and Angelina (2020) to analyze global shareholder value effects of cyber breaches from 1990 to 2019 for five major non-US countries. Cumulative Average Returns (CARs) are calculated using the first notice date to periods of up to 90 days post-announcement to compare short-term and long-term effects of cyber breaches on the stock price. Results for this data set show significant negative returns for US corporations in all windows. Unlike its US counterparts, short-term results for non-US countries show no significant changes to price as a result of cyber breach announcements. Long-term results for the aggregate non-US sample show significance only at the (0,30) window. Individual country long-term analysis shows some significance depending on the event windows, but no common patterns are seen among countries. These results point to differences in how news of a cyber breach, by country, is perceived in the market. The results help explain some of the patterns insurance companies have seen in the reticent buying habits of global companies with respect to cyber insurance.

Keywords: Cyber, Breach, Shareholder Value, Global, Insider Information, Insurance, Corporate Strategy, Event Study Analysis

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

Acknowledgements: The Author would like to thank Advisen Ltd. for providing me with a comprehensive database of cyber data events using both their “Standard Loss Feed Data Set” and access to their “Cyber OverVue” products. The Author would also wish to thank Dylan Vogt for his help with some of the data analysis.

JEL Classification: F2, G1, G14, G32

Received: 21.02.2020
Accepted: 08.05.2020
Published online: 15.05.2020

How to cite this paper: Hogan, K. M. (2020). A global comparison of corporate value adjustments to news of cyber-attacks. Journal of Governance & Regulation, 9(2), 34-44. https://doi.org/10.22495/jgrv9i2art2