Stock market reactions to favorable and unfavorable information security events: A systematic literature review

Ali, Syed Emad Azhar; Lai, Fong–Woon; Dominic, P. D. D.; Brown, Nicholas James; Lowry, Paul Benjamin; Ali, Rao Faizan

doi:10.1016/j.cose.2021.102451

Cited by 20 publications

(18 citation statements)

References 80 publications

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“…Despite no intended US focus, we see that 28 out of 37 (76%) announcements originated from US markets so there is little opportunity to analyse other markets in detail. This percentage matches closely the observation of Ali et al (2021) on US dominance in such research who attribute this to regulatory effects encouraging transparency in addition to language restrictions. Over time there is an expectation that transparency (and thus availability of data) will increase in other markets as new regulations come into force.…”

Section: Figure 2: Comparison Of Event Windowssupporting

confidence: 86%

“…Deane et al (2019) studied ISO 27001 certification announcements and found the abnormal market returns both positive and statistically significant (0.72% on average over two days). A more recent systematic literature review (Ali et al 2021) updating the work of Spanos and Angelis (2016) acknowledges the relative lack of studies concerning the positive impact of favourable information security events such as regulation, certification or investment also noting that such favourable events generate lower magnitude abnormal returns (in the range 0.63% to 1.36%) than unfavourable events which could lose up to 10% of market value.…”

Section: Related Workmentioning

confidence: 99%

“…This study, therefore, will not only increase the CISO research knowledgebase but also help address the shortfall in studies on favourable security events. Ali et al (2021) also note that 76% of existing similar studies were based solely on US data, so the aim here was also to look globally as far as possible (given English language restrictions) in an attempt to offset this US bias (cf. Ford et al 2021b).…”

Section: Related Workmentioning

confidence: 99%

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Impact of CISO Appointment Announcements on the Market Value of Firms

Ford

Al-Nemrat

Ghorashi

et al. 2022

iccws

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Previous studies concerning the economic impact of security events on publicly listed companies have focussed on the negative effect of data breaches and cyberattacks with a view to encouraging firms to improve their cyber security posture to avoid such incidents. This paper is an initial study on the impact of investment in human capital related to security, specifically appointments of chief information security officers (CISO), chief security officers (CSO) or similar overall head of security roles. Using event study techniques, a dataset of 37 CISO type appointment announcements spanning multiple world markets between 2012 and 2019 was analysed and statistically significant (at the 5% level) positive cumulative abnormal returns (CAR) of around 0.8% on average were observed over the three-day period before, during and after the announcement. Furthermore, this positive CAR was found to be highest, at nearly 1.8% on average, within the financial services sector and showing statistical significance at the 1% level. In addition to the industry sector, other characteristics were investigated such as job title, reporting structure, comparison of internal versus external appointments, gender and variations between markets. Although these findings were not as conclusive they are, nevertheless, good pointers for future research in this area. This overall positive market reaction to CISO related announcements is a strong case for publicly listed firms to be transparent in such appointments and to, perhaps, review where that function sits within their organisation to ensure it delivers the greatest benefits. As 24% of the firms analysed were listed outside the US, this study also begins to counter the strong US bias seen in similar and related studies. This research is expected to be of interest to business management, cyber security practitioners, investors and shareholders as well as researchers in cyber security or related fields.

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Section: Figure 2: Comparison Of Event Windowssupporting

confidence: 86%

Section: Related Workmentioning

confidence: 99%

Section: Related Workmentioning

confidence: 99%

See 1 more Smart Citation

Impact of CISO Appointment Announcements on the Market Value of Firms

Ford

Al-Nemrat

Ghorashi

et al. 2022

iccws

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“…Enterprises rely on their ability to differentiate themselves from the competition in order to survive in the market. Regardless of whether the organization is experiencing success or adversity, it must have the ability to surpass itself and continue to innovate in order to achieve sustainable development [ 30 , 31 ].…”

Section: Relationship Between Digital Transformation and Enterprisesmentioning

confidence: 99%

Digital Transformation and Financial Risk Prediction of Listed Companies

Xinxian

Cai

2022

Computational Intelligence and Neuroscience

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Digitalization is a revolution, a frontal battleground in the new global competitive landscape, and a long-distance race for which all employees must be prepared, and organizations must actively embrace the resulting changes. The article begins by analyzing three characteristics of digital transformation and enterprise growth: the heterogeneity of digital transformation’s impact on enterprise growth and the process by which digital transformation influences enterprise growth. In addition, this article develops a convolutional neural network-based financial early warning model to aid businesses’ digital transformation initiatives.

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“…The current economic development in Indonesia cannot be separated from the role of the capital market (Robiyanto et al, 2019). During the pandemic, many companies experienced a decrease in company performance or income, with information found the cause of the price decline, namely a deviant reaction from investors (Ali et al, 2021). Due to the market reaction information, investors tend to immediately sell stocks whose prices have fallen drastically.…”

Section: Introductionmentioning

confidence: 99%

The Role of Overreaction in Consumer Goods Industry Sector - Cosmetics & Home Supplies on the Indonesia Stock Exchange

Komariah

Nurbastian

2022

adv

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This study aims to see whether there is an overreaction effect on the company's stock price in the Consumer Goods Industry Sector - Cosmetics & Home Supplies which are listed in the period January 2019 - February 2022 on the Indonesia Stock Exchange. Sampling in this study was carried out using purposive sampling method. This method has the criteria that the shares are always listed in the research period. The researcher uses data analysis in the form of simple linear regression and to answer normality using the Central Limit Theorem which is to find out whether the data submitted is normal. This study proves empirically that overreaction has an influence on stock prices, so that in its implications for stock investment investors do not have adequate understanding and are easy to accept information that is not necessarily true.

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Stock market reactions to favorable and unfavorable information security events: A systematic literature review

Cited by 20 publications

References 80 publications

Impact of CISO Appointment Announcements on the Market Value of Firms

Impact of CISO Appointment Announcements on the Market Value of Firms

Digital Transformation and Financial Risk Prediction of Listed Companies

The Role of Overreaction in Consumer Goods Industry Sector - Cosmetics & Home Supplies on the Indonesia Stock Exchange

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