Browse > Article
http://dx.doi.org/10.15813/kmr.2019.20.4.003

Market Reaction to IT Security Investment Announcements  

Park, Jaeyoung (연세대학교 정보대학원)
Jung, Woo-Jin (연세대학교 정보대학원 바른ICT연구소)
Publication Information
Knowledge Management Research / v.20, no.4, 2019 , pp. 39-55 More about this Journal
Abstract
Although Firms have been increasing their information security significantly to handle increased security risks, the effects of information security were not well understood. This study aims to investigate the market value of information security by employing the event study methodology. Our research also explores how market responses vary depending on the type of information security announcements. We collected 177 firm-level information security announcements between 2001 and 2017 in South Korea. For all samples, our results indicate that the stock market positively reacts to information security announcements. We also conducted subsample analysis and found that while information security certification announcement has a positive impact on the stock market, information security activities (e.g. award, information security system) announcement had no impact on the stock market. Our study adopted a novel approach (i.e. event study) for investigating the effects of information security and found that information security investment positively affects firm value. Our results allow managers to measure the effects of information security investment and help them make right decisions on information security investment.
Keywords
Event study; Market reaction; Announcement; Information security investment; CAR;
Citations & Related Records
Times Cited By KSCI : 2  (Citation Analysis)
연도 인용수 순위
1 Dehning, B., Richardson, V. J., and Zmud, R.W. 2003. "The Value Relevance of Announcements of Transformational Information Technology Investments," MIS Quarterly (27:4), pp. 637-656.   DOI
2 박재영, 정우진, 김범수 2016. "기업의 정보보호 인증이 기업가치에 미치는 영향," 한국IT서비스학회지 (15:3), pp. 51-69.   DOI
3 박현성, "기업의 환경경영이 기업가치에 미치는 영향 분석," 박사학위논문, 중앙대학교, 2010.
4 Docking, D. S., and Dowen, R. 1999. "Market Interpretation of ISO 9000 Registration," Journal of Financial Research (22:2), pp. 147-160.   DOI
5 Fama, E. F. 1965. "The Behavior of Sock Market Price," Journal of Business (38:1), pp. 33-105.
6 Fama, E.F., Fisher, L., Jensen M.C., and Roll, R. 1969. "The Adjustment of Stock Prices to New Information," International Economic Review (10:1), pp. 1-21.   DOI
7 Hendricks, K. B., and Singhal, V. R. 1997. ‟Does Implementing an Effective TQM Program Actually Improve Operating Performance?: Empirical Evidence from Firms that Have Won Quality," Management Science (43:9), pp. 1258-1274.   DOI
8 Im, K. S., Dow, K. E., and Grover, V. 2001. "A Reexamination of IT Investment and the Market Value of the Firm-An Event Study Methodology," Information Systems Research (12:1), pp. 103-117.   DOI
9 Oh, W., Kim, J. W., and Richardson, V. J. 2006. "The Moderating Effect of Context on the Market Reaction to IT Investments," Journal of Information Systems (20:1), pp. 19-44.   DOI
10 권영옥, 김병도 2007. "정보보안 사고와 사고 방지 관련 투자가 기업가치에 미치는 영향," Information Systems Review (9:1), pp. 105-120.
11 김광용, 주미진, 김진수 2016. "개인정보 유출이 기업의 주가에 미치는 영향," 인터넷전자상거래연구 (16:3), pp. 53-65.
12 김 보, 임종인 2014. "기업 보안평가 공시제도의 필요성 및 구현방안 (금융회사 중심으로)," 한국인터넷방송통신학회 논문지 (14:6), pp. 273-279.
13 김찬웅, 김경원 1997. "사건연구에서의 주식성과 측정," 한국증권학회지 (20:1), pp. 301-327.
14 강성민, 장강일 2005. "기업의 IT 투자 평가 효율화를 위한 지표 도출 및 투자관리체계에 관한 사례연구," Information Systems Review (7:1), pp. 219-239.
15 서영호, 이현수 1999. "국내 품질경영상 수상업체들의 주식시장에서의 성과에 관한 연구," 품질경영학회지 (7:3), pp. 51-66.
16 Zhang, T., Wang, W. Y. C., and Pauleen, D. J. 2017. "Big Data Investments in Knowledge and non-Knowledge Intensive Firms: What the Market Tells Us," Journal of Knowledge Management (21:3), pp. 623-639.   DOI
17 Choi, B., and Jong, A. M. 2010. "Assessing the Impact of Knowledge Management Strategies Announcements on the Market Value of Firms," Information & Management (47:1), pp. 42-52.   DOI
18 Roztocki, N., and Weistroffer, H. R. "Event Studies in Information Systems Research: A Review," Proceedings of the Fourteenth Americas Conference on Information Systems, 2008.
19 Armitage, S. 1995. "Event Study Methods and Evidence on their Performance," Journal of Economic Surveys (9:1), pp. 25-52.   DOI
20 백종현, 권순범, 최병구 2012. "대기업-중소기업의 상생협력 정책이 기업가치에 미치는 영향: 이벤트 연구방법론을 기반으로," 지식경영연구 (13:5), pp. 139-160.
21 오병섭, 박지영, 정승환, 최강화 2010. "한국의 서비스 품질상 수상이 기업가치에 미치는 영향: 사건연구방법론적 접근," 경영과학 (27:3), pp. 161-196.
22 전효정, 김태성 2012. "정보보안 공시제도 도입을 위한 타당성 분석과 운영체계 제언," 정보보호학회논문지 (22:6), pp. 1393-1405.
23 최병구, 이재남 2015. "지식집중화 정도가 지식소싱 전략과 기업성과 간의 관계에 미치는 효과 분석," 지식경영연구 (16:1), pp. 1-19.   DOI
24 한완선 2004. "환경성과와 재무성과," 산업경제연구 (17:5), pp. 1877-1891.
25 Binder, J. 1998. "The Event Study Methodology Since 1969," Review of Quantitative Finance and Accounting (11:2), pp. 111-137.   DOI
26 Bose, I., and Leung, A. C. M. 2013. "The Impact of Adoption of Identity Theft Countermeasures on Firm Value," Decision Support Systems (55:3), pp. 753-763.   DOI
27 Brown, S. J., and Warner, J. B. 1985. "Using Daily Stock Returns: The Case of Event Studies," Journal of Financial Economics (14:1), pp. 3-31.   DOI
28 Chai, S., Kim, M., and Rao, H. R. 2011. "Firms' Information Security Investment Decisions: Stock Market Evidence of Investors' Behavior," Decision Support Systems (50:4), pp. 651-661.   DOI
29 Chatterjee, D., Richardson, V. J., and Zmud, R.W. 2001. "Examining the Shareholder Wealth Effects of Announcements of Newly Created CIO Positions," MIS Quarterly (25:1), pp. 43-70.   DOI