The impact of data breaches on market value of firms in the E-Commerce marketplace

Using a sample of information and security data breaches the present research examines the public announcement impact between Brick and Mortar firms and E-Commerce firms. The dissertation initially analyzes the effects of publicly announced information and security breaches on abnormal stock returns, abnormal trading volume, and firm risk. The dissertation then analyzes differential impact between Brick and Mortar firms and E-Commerce firm's market value following a data breach. Using a sample size of 38 information security breaches, E-Commerce firms resulted in more negative abnormal stock returns than Brick and Mortar firms. While data breach announcements did not significantly impact retail firms as a whole, they did have a significant impact when broken into the subsets. E-Commerce firms that announced an information security breach experienced abnormal trading volume.