This study measures the economic consequences of information security activities, in general, and more specifically the market value of disclosures of information security activities. Since information security activities are primarily non-revenue generating, management tends to view them as the cost-of-doing-business, with no impact on firm value. Furthermore, managers are reluctant to share the details, because that they do not want to attract the attention of hackers. However, voluntary disclosures of information security can help reduce information asymmetry, which leads to belief revisions by investors, and hence corrects the misspecifications (if any) of the firm’s market value…
Author: Sohail, Tashfeen
Source: University of Maryland
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