The impact of information systems vulnerability announcements on firms’ market value

Authors

Xueming Niu, Beijing Jiao Tong University, Beijing, ChinaFollow
Weihua Li, Beijing Daxing District No. 1 Vocational School, Beijing, ChinaFollow
Jinfeng Zhang, Nankai UniversityFollow
Xiong Zhang, Beijing Jiao Tong University, Beijing, ChinaFollow
Jianlong Chen, Beijing Jiao Tong University, Beijing, ChinaFollow
Haijie Xu, Beijing Jiao Tong University, Beijing, ChinaFollow

Abstract

With the increasing deployment of IT systems, information systems vulnerabilities have led to a severe negative impact on firms and businesses. This paper aims to examine the impact of information system vulnerability announcements on the market value of Chinese firms. Using the collected security incidents in Chinese firms from 2015 to 2021, we study how characteristics of enterprises and vulnerabilities affect enterprises’ market value through event study and regression analysis. In particular, we find that state-owned enterprises suffer larger negative effects than other types of firms. This study also provides companies and managers with insights in decision-making and recommendations from a managerial perspective.

Recommended Citation

Niu, Xueming; Li, Weihua; Zhang, Jinfeng; Zhang, Xiong; Chen, Jianlong; and Xu, Haijie, "The impact of information systems vulnerability announcements on firms’ market value" (2022). ICEB 2022 Proceedings (Bangkok, Thailand). 70.
https://aisel.aisnet.org/iceb2022/70