PLANNING TECHNOLOGY INVESTMENTS FOR HIGH PAYOFFS: A RATIONAL EXPECTATIONS APPROACH TO GAUGING POTENTIAL AND REALIZED VALUE IN A CHANGING ENVIRONMENT

Myung Ko, Kweku-Muata Osei-Brysonb and Carlos Dorantesa
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Myung Ko: University of Texas at San Antonio
Kweku-Muata Osei-Brysonb: Virginia Commonwealth University
Carlos Dorantesa: University of Texas at San Antonio

No 40, Working Papers from College of Business, University of Texas at San Antonio

Abstract: This paper examines the impact of information security breaches on organizational performance. Up to date, there have been only a few empirical academic studies that have investigated this issue and they have investigated information security breaches with the focus on the short-term impact on the market value of the firm. This study offers an alternate approach to investigate this issue as it explores the impact of breaches on financial performance of the firm, one year after the breach. Using a “matched sampling” methodology, we explored the impact of each type of breach (i.e. confidentiality, integrity, and availability) and also by IT intensity and size. Our results suggest that the direction of the impact (i.e. positive, negative) is dependent on the type of security breaches and also the impact of IT intensive firms is different from non-IT intensive firms. Our study also includes some important implications for managers and stock market investors.

Keywords: Information security; impact; security breach; organizational performance; confidentiality; integrity; availability (search for similar items in EconPapers)
JEL-codes: M15 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2008-02-20
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