The Impact of Information Security Breaches on the Market Value of the Banking Industry
Date Issued
2004
Date
2004
Author(s)
Chen, Mei-Chun
DOI
zh-TW
Abstract
The increase in information security breaches in the last few years has put the banking industry in Taiwan under pressure to intensify its information security. However, very little is known of the financial impact associated with these breaches. This study examines the impact of information security breaches on the market value of the banking industry in Taiwan. Event study methodology was used to conduct the study. Three types of information security breaches are investigated. The first are security incidents that have occurred on the network platform established by Financial Information Service Co. Ltd. The second types are incidents caused by outside intruders of various banks’ computer systems. The third types are those breaches committed by employees of various banks. The results show that information security breaches in each individual bank significantly affect the market value of other banks. The spill-over effect was proved significant in both of the second and the third types of incidents. Although the effects of the first type of incidents are not statistically significant, the banking industry still suffers great losses in stock market value.
Subjects
外溢效果
事件研究
銀行業
event study
information security
banking industry
spill-over effect
Type
other