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The value of cybersecurity: Stock market reactions to security breach announcements
KTH, School of Industrial Engineering and Management (ITM).
KTH, School of Industrial Engineering and Management (ITM).
2019 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesisAlternative title
Värdet av datasäkerhet : Marknadsreaktioner på datasäkerhetsincidenter (Swedish)
Abstract [en]

Companies around the world invest an increasing amount of money trying to protect themselves from cybercrime and unauthorized access of valuable data. The nature of these covert threats makes it seemingly impossible to quantify the risk of getting attacked. While it is possible to estimate the tangible costs of a security breach it is much harder to asses what a company stands to lose in terms of intangible costs.

This thesis uses the Event Study methodology to determine the intangible losses of listed American companies who suffered data breaches. On average, the companies in the dataset loses 0.21% of their market cap after a security breach which, although not being statistically significant, translates to $267 million. Despite looking at several parameters to find significant predictors, only one turned out to be statistically significant, namely the number of records breached. These weak correlation is a result in itself; because of the low impact of a breach perhaps the companies lack proper incentives to protect their users' data.

Abstract [sv]

Det ständigt växande cyberhotet gör att allt fler företag väljer att göra stora investeringar i datasäkerhet. Den dolda hotbilden gör det i stort sett omöjligt att kvantifiera sannolikheten för att råka ut för en attack. Även om det går att avgöra och förutspå de direkta kostnaderna kring ett dataintrång så är det nästintill omöjligt att avgöra de indirekta kostnaderna kring ett dataintrång.

Detta arbete använder eventstudie-metodologin för att uppskatta de indirekta kostnaderna hos börsnoterade amerikanska företag efter att de haft ett dataintrång. Företagen i den undersökta datamängden förlorar i genomsnitt 0.21% av sitt marknadsvärde vilket, även om det saknar statistisk signifikans, motsvarar $267 miljoner. Arbetet undersöker ett antal parametrar för att hitta signifikanta prediktorer men endast en av de prediktorer vi undersökte var statistiskt signifikant, nämligen antalet läckta uppgifter. Dessa svaga samband är i sig intressanta; den till synes svaga inverkan av dataintrång på företagens börsvärde antyder att de kanske inte har så stora finansiella incitament att skydda sina kunders data.

Place, publisher, year, edition, pages
2019. , p. 67
Series
TRITA-ITM-EX ; 2019:347
Keywords [en]
Cybersecurity, Information security, InfoSec, Event study, cyberinsurance, data breach
Keywords [sv]
Datasäkerhet, informationssäkerhet, infosec, Eventstudie, cyberförsäkring, dataintrång
National Category
Engineering and Technology
Identifiers
URN: urn:nbn:se:kth:diva-264124OAI: oai:DiVA.org:kth-264124DiVA, id: diva2:1372179
External cooperation
Edgeguide AB
Supervisors
Examiners
Available from: 2019-11-22 Created: 2019-11-22 Last updated: 2019-11-29Bibliographically approved

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