A Comparative Study On The Impact Of Information Security Incidents And Corporate Response Strategies On Market Value

The frequent occurrence of information security incidents has brought huge losses to companies and users.In the face of such a crisis event,it is very important for companies to respond.Adopting appropriate countermeasures can reduce the negative impact of incidents on companies,and can also reshape users’ trust in companies.Although information security incidents are common,there are few studies on corporate response strategies for information security incidents,and few scholars pay attention to whether the same corporate response strategies will bring different effects under different cultural backgrounds.The purpose of this research is to analyze and compare the impact of information security incidents and corporate response strategies on the market value of listed companies in China and the United States,so as to deepen the understanding of the impact of information security incidents on companies in academia and industry,and provide theoretical guidance for companies in different cultural backgrounds to deal with information security incidents.This research first clarifies the definition of information security incidents,and at the same time,based on the classification of crisis response strategies and combined with the real response situation of companies,the corporate response strategies in information security incidents are divided into three categories: deny,diminish and rebuild.Subsequently,this research puts forward research hypotheses based on the theoretical basis of cultural tightness-looseness and cultural context,and collects more than 200 cases of information security incidents in the Chinese and American markets,and uses event study methodology and regression analysis to verify the hypotheses.The research results show that:(1)Information security incidents have a negative impact on the market value of listed companies in China and the United States,but there are differences in the time of impact.For US-listed companies,the negative impact occurs before the event announcement;for Chinese listed companies,the negative impact is concentrated after the event announcement.(2)Different types of response strategies have different impacts on the market value of listed companies in China and the United States.Specifically,diminish response strategies have a negative impact on the market value of Chinese listed companies;while rebuild response strategies have a positive impact on the market value of US listed companies.