Exploring Impacts of IT Service Failure on Firm's Market Value

This study investigates the effects of IT service failures on market values of companies that announce their IT service failures. To measure the effects of IT service failures on stock prices of the responsible companies, we examine the stock price changes before and after IT service failure announcements. The results show that the stock price reactions to IT service failure announcements are negative. In addition, it finds that the stock prices of the responsible companies react to various types of IT service failures differently.