Can cross-listing Mitigate the Impact of An Information Security Breach Announcement on a Firm's Values?

The increase in globalization in the markets has driven firms to adopt online technologies and to cross-list (listing the stock on multiple exchanges in multiple countries) their stocks. Recent studies have consistently found that the announcements of information security breaches (ISBs) are negatively associated with the market values of the announcing firms during the days surrounding the breach announcements. Given the improvement in firms' information environments and the better protection for investors generated by cross-listing, does cross-listing help firms to reduce the negative impacts caused by their announcements of ISBs? This paper conducts an event study of 120 publicly traded firms (among which 25 cross-list and 95 do not), in order to explore the answer. The results indicate that the impact of ISB announcements on a firm's stock prices shows no difference between cross-listing firms and noncross-listing firms. Cross-listing does not mitigate the impact of ISBs announcement on a firm's market value.