HACKED: Understanding the stock market response to cyberattacks

Akyildirim, Erdinc; Conlon, Thomas; Corbet, Shaen; Hou, Greg

Abstract

Increasing levels of digitisation make firms more susceptible to cyberattacks and privacy violations. In this paper, we quantify the impact of cybercrime on company stock returns using a large international sample. On the day after the cyber event, stock returns are found to decrease by-0.24%, but the effect reverses in about two weeks. The magnitude of the decrease in the stock market is greatest for companies that have experienced reoccurring events and for breaches deemed to be most severe. We show that the extent of the stock market decline cannot be explained by national institutional and macroeconomic factors, and is related to company-specific characteristics, including size, volatility, credit ranking and asset volatility. The empirical results highlight important policy and regulatory issues, not least the need for cyber risk disclosure requirements.

Citation

Akyildirim, E., Conlon, T., Corbet, S., & Hou, G. (2024). HACKED: Understanding the stock market response to cyberattacks. Journal of International Financial Markets, Institutions and Money, 97, Article 102082. https://doi.org/10.1016/j.intfin.2024.102082

• Journal Article Type: Article
• Acceptance Date: Nov 9, 2024
• Online Publication Date: Nov 22, 2024
• Publication Date: Dec 1, 2024
• Deposit Date: Dec 20, 2024
• Publicly Available Date: Nov 23, 2025
• Journal: Journal of International Financial Markets, Institutions and Money
• Print ISSN: 1042-4431
• Electronic ISSN: 1873-0612
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 97
• Article Number: 102082
• DOI: https://doi.org/10.1016/j.intfin.2024.102082
• Keywords: Reputation; Cyber Attack; Privacy Violation; Global Financial Markets; Corporate Resilience; Corporate Social Responsibility JEL Classifications: G14; G32; G38; O38
• Public URL: https://nottingham-repository.worktribe.com/output/43098177
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S1042443124001483?via%3Dihub
• Additional Information: This article is maintained by: Elsevier; Article Title: HACKED: Understanding the stock market response to cyberattacks; Journal Title: Journal of International Financial Markets, Institutions and Money; CrossRef DOI link to publisher maintained version: https://doi.org/10.1016/j.intfin.2024.102082; Content Type: article; Copyright: © 2024 Elsevier B.V. All rights are reserved, including those for text and data mining, AI training, and similar technologies.