Earticle

초록

영어

If a firm announces an investment in IT security, how the market value of its competitors reacts to the announcement? We try to shed light on this question through an event study design. To test the relationship, we collected 143 announcements on cybersecurity investment and measured the subsequent impact on 533 competitors’ abnormal returns, spanning from 2000 to 2019. Our estimation results present that, on average, the announcements have no observable impact on the market value of announcing firms and competitors as well, which is consistent with findings of a prior study. Interestingly, however, the impact becomes evident when we classify our samples by industries (Finance vs. non-Finance or ICT vs. non-ICT) and firm size (Big vs. Small). We interpret our empirical findings through the lenses of contagion effect and competition effect between announcing firms and their competitors. Key finding of our study is that, for financial service firms, the effect resulting from the announcement on cybersecurity investment transfers to competitors in the same direction (i.e., contagion effect).

목차

ABSTRACT
Ⅰ. Introduction
Ⅱ. Literature Review
2.1. Prior Studies on IT Investment
2.2. Prior Studies on IT Security Investment
Ⅲ. Hypotheses Development
3.1. Announcement and Subsequent Effect on Announcing Firm
3.2. Announcement and Subsequent Effect on Competitors
3.3. Heterogenous Impact by Industry -Finance vs. non-Finance
3.4. Heterogenous Impact by Industry -ICT vs. non-ICT
3.5. Heterogenous Impact by Firm Size
Ⅳ. Theoretical Underpinnings
4.1. Efficient Market Hypothesis
4.2. Announcement and Abnormal Return
Ⅴ. Methodology
5.1. Event Study
5.2. Data
5.3. Measure
Ⅵ. Results
6.1. CAAR Results - Announcing Firm and Competitors
6.2. CAAR Results - Finance vs. non-Finance
6.3. CAAR Results - ICT vs. non-ICT
6.4. CAAR Results - Big vs. Small
Ⅶ. Discussion
7.1. Discussion of Findings
7.2. Implication
7.3. Limitation and Future Research Direction
Acknowledgement

저자

• Young Jin Kwon [ Master Student, Information Systems (IS), Hanyang University, Korea ]
• Sang-Yong Tom Lee [ Professor, School of Business, Hanyang University, Korea ] Corresponding Author

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