Semester Award Granted

Spring 2025

Submission Date

May 2025

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Thesis/Dissertation Advisor [Chair]

Chul Woo Yoo

Abstract

Data security breaches continue to be a primary concern for businesses. The possibility of losing sensitive customer data and how that might impact their firm is part of what keeps executives up at night. Past research has largely centered around how a data security breach might impact firm performance as measured by cumulative abnormal returns (CAR), or from an investor’s perspective. This research has produced inconsistent results, with some research efforts showing large negative impacts on market value while others show no impact at all. Through this research effort, I explore possible reasons for these inconsistent findings. Under Interpersonal Gossip Theory, such breaches may influence consumer trust, resulting in behavior changes that impact a firm’s sales, profit, etc., and likewise, firm performance. I will discuss the use of accounting ratios to measure firm performance rather than market fluctuations. Systems of measurement such as Return on Invested Capital (ROIC) and Tobin’s q/Total q might provide a more consistent view of firm performance after a data security breach, allowing for an examination over a longer time period rather than just the immediate window surrounding the breach event. Using these ratios, I will discuss the possible differences in consumer and investor perspective and how they might impact firm performance after a confidential data breach.

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