The Impact of Cybersecurity Breaches on Shareholder Value: A Quantitative Analysis

Abstract

In the increasingly digital landscape of modern finance, cybersecurity breaches have emerged as a significant threat to corporate value and investor confidence. This study provides a quantitative analysis of the impact of such breaches on shareholder value, using a dataset comprising various publicly traded companies that have experienced notable cybersecurity incidents over the past decade. Through regression analysis and event study methodology, we quantify the immediate and long-term effects of these incidents on stock prices. Our results reveal a statistically significant negative impact on the market valuation of affected companies, highlighting the critical importance of robust cybersecurity measures. This paper contributes to the literature by providing empirical evidence on the financial consequences of cybersecurity vulnerabilities and serves as a resource for investors, policymakers, and corporate executives aiming to mitigate these risks.